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How Strong is the Real Estate Market in Australia’s Capital Cities?

Sydney HarbourThe Domain Metro State of the Market Report, released by Domain Group late last month, showed that while median house rates eased off in capital cities, median house prices mostly rose across the June quarter.
The median house price across Australia saw a 1.7% uplift, hitting a record breaking high of $818,416. That’s 10% higher than it was in June of 2016, but it’s still the lowest increase since March 2016.

Unit prices also saw an increase of 1.7% – the fifth growth quarter in a row for units putting median prices at $573,064.

Although house prices are on the rise, the rate at which prices are growing is starting to slow down. Despite last year’s interest rate cuts, the majority of capital city housing markets have shown substantial Winter growth. Hobart and Canberra in particular performed well, the former reaching gross rental yields of 5.38% for houses and the latter hitting 5.71% for units.

The exceptions to the forming rule were Brisbane, Perth and Darwin, 3 areas continuing to show a decline in performance.

Here’s how each of the cities are performing:

Sydney – on the up

Considering the record-setting levels of apartment construction, unit prices in the city are now rising at a faster pace than houses, reporting the highest rate of growth in the past 2 years.

Median unit price:

3.1% increase over the quarter, and 12.7% over the year reaching $757,991.

Median house price:

1.6% increase over the quarter, and 12.7% over the year, reaching $1,178,416.

Median unit rents:

Steady quarterly growth, with a 3.8% increase on the last year, up to $550 per week.

Median house rents:

Equally steady, matching units with a 3.8% increase to $550 per week.

Melbourne – on the up

The property market in Melbourne continues to find new areas of strength, having now hit an incredible 19 quarters in a row of stable house price growth. Although predictions were in favour of over construction of units, demand still outweighs supply and the market doesn’t look to be slowing down.

Median unit price:

Showing a 2.1% increase over the quarter, rising 4.6% from last year to $474,848.

Median house price:

Showing a 3.5% increase over the quarter, rising 15.1% from last year, hitting a record high of $865,712.

Median unit rents:

Rising 1.3% over the last quarter, and up 5.3% over the last year, to $400 a week.

Median house rents:

Steady quarterly growth, increasing 5% from last year to $420 per week.

Brisbane – steadily declining

The impact of significant apartment construction has begun to hit Brisbane, with median prices and rents falling across the board. The median unit price drop of 5.5% is the steepest Brisbane has seen in over 15 years.

Median unit price:

Declined by 5.5% over the quarter, down 4.9% compared to last year.

Median house price:

Declined by 0.1% over the quarter, but up 3.1% over the year to $546,043.

Median unit rents:

Decreased by 2.6% over the quarter.

Median house rents:

Decreased by 1.2% over the quarter, but steady over the last year to $400 per week.

Adelaide – on the up

Adelaide still stands as the mainland’s most affordable city, regardless of the underperforming local economy. House prices in the city continue to produce dependable results, having shown an increase in median house prices 11 quarters in a row.

Median unit price:

0.9% increase over the quarter, rising 6.6% over the year to $524,968.

Median house price:

Rising 0.9% over the quarter, and increasing 6.6% over the year to $524,968.

Median unit rents:

Decreased by 1.7% over the quarter, but up 1.8% over the year to $290 per week.

Median house rents:

Steady quarterly performance and up 2.9% on last year to $360 per week.

Perth – across the board declines

Opinions on Perth’s real estate market revival could be ill-conceived, as house pries show another heavy drop for the quarter. Unit prices, however, are hitting back hard, displaying reliable growth.

Median unit price:

3.8% decline across the quarter, but up 1.1% over the year to $377,823.

Median house price:

1.8% quarterly decline, and down 1.1% across the year to a close-on 5-year low of $555,788.

Median unit rents:

Steady quarterly performance, but down 10.4% across the year to $300 per week.

Median house rents:

2.7% quarterly decline, and down 7.7% across the year to $360 per week.

Canberra – mostly price decreases

The steady growth of house prices has bred increased confidence in the Canberra market. However, a surge in apartment supply has created a drop in median unit prices, reaching the lowest point in nearly 8 years.

Median unit price:

2.9% quarterly decline, and a 3.7% annual drop to $403,128.

Median house price:

3.9% quarterly increase and an 8.9% annual increase to $723,299.

Median unit rents:

2.3% quarterly decline, but up 5% annually to $420 per week.

Median house rents:

Steady quarterly growth, with a 6.4% annual increase to $500 per week.

Hobart – on the up

The Hobart market is still performing well, setting records for highest median house price growth since 2003 and an ever-strong growth rate, a clear reflection of the bustling local economy.

Median unit price:

3.8% quarterly increase and an annual increase of 7.7%, hitting record levels at $310,854.

Median house price:

4.3% quarterly increase, rising 15.2% over the year to $404,522.

Median unit rents:

4.1% quarterly increase, and an annual increase of 14.3% to $320 per week.

Median house rents:

A slight quarterly decline of 1.4% to $360 per week.

Darwin – on the up

Darwin’s property market is showing good signs of growth, with house prices set to increase in line with the return of buyer confidence and heightened affordability.

Median unit price:

13.4% quarterly decline and 23.5% annual drop to $351,880.

Median house price:

6.1% quarterly increase and an annual rise of 12.2% to $666,686.

Median unit rents:

4.8% quarterly decline and a 9.1% annual drop to $400 per week.

Median house rents:

5.5% quarterly and annual decrease to $520 per week.