New figures have seen Australian capital city house prices increase over the quarter, but economists say the property market may be showing signs of cooling.
The Residential Property Price Index released by the Australian Bureau of Statistics on Tuesday saw Australian capital city house prices increase by 1.5% in the quarter to June, and a 10.1% increase in the year to June 2014.
Not surprisingly, Sydney headed the increase – with a 3.1% rise in house prices over the quarter. Melbourne was next with an increase of 1.3%, followed by Brisbane with an increase of 1.8%. Perth was the only city which experienced a fall in house prices in the quarter, dropping 0.2%.
The ABS director of RPPI, Robin Ashburn, said there was a sharp incline in property prices over the full year to June 2014.
"The mean price of dwellings in Australia is now $554,800, an increase of $45,000 over the year, this is more than twice the increase over the year to June 2013,” Ashburn said.
But Housing Industry Association economist Diwa Hopkins said the market may now be showing signs of cooling.
“While it’s too early to call a trend, the signs are mounting that price growth is easing back to a more sustainable pace. Annual growth reached what looks to be a cyclical peak rate of 10.9% in the March 2014 quarter. This rate eased back to 10.1% per annum in the June quarter,” she said.
Steady and sustainable growth will provide some much needed relief to Australian home buyers and housing affordability. The HIA also predicts
new home building activity to heat up this year, thanks to the strength of the property market, which could ease price pressures.