The rate of price growth has eased in Australia’s capital cities, according to new figures released by the Australian Bureau of Statistics.
The annual growth rate of house prices across Australia’s eight capital cities eased to 8.7% in the December 2015 quarter, driven in part by a deceleration of Sydney dwelling price growth.
“From an affordability perspective, the slowdown in dwelling price growth to a more sustainable pace is a welcome development,” Housing Industry Association (HIA) senior economist, Shane Garrett said.
Garrett also pointed out the final quarter of 2015 also saw a narrowing of the gap between the capital cities in terms of price growth.
“In previous quarters, the divergence in the pace of price growth from city to city was very large,” he said.
According to Garrett, the increase in housing supply is helping to ease price pressures.
“During 2015, a record 220,000 new dwellings commenced construction across Australia. The additional supply is playing an important role in containing the severe price pressures in markets like Sydney and Melbourne.
“Ensuring an adequate supply of new housing in the future requires root-and-branch reform in areas like planning, land supply and the taxation burden on residential building.”
In the year to the December 2015 quarter, dwelling price growth remained strongest in Sydney (13.9%), followed by Melbourne (9.6%), Canberra (6%) and Brisbane (4.2%).
Hobart also achieved price growth (3.5%) as well as Adelaide (3.3%). Dwelling prices declined in both Darwin (-3.2%) and in Perth (-2.9%) in the year to the December 2015 quarter.