Property prices in Sydney surge while other capitals underperform: ABS
30 June 2015 Toby Johnstone
The value of Australian real estate is now $5.5 trillion, according to the Australian Bureau of Statistics.
Sydney's property prices have continued to surge in 2015 leaving the other Australian capitals in its wake.
Figures released on Tuesday by the Australian Bureau of Statistics show that prices in Sydney jumped a further 3.1 per cent over the March quarter while the other capitals were largely flat or falling.
"Sydney is standing out like a sore thumb," said St George Bank senior economist Hans Kunnen.
"There are certain constraints in Sydney that aren't going away any time soon: population growth, low interest rates, self-managed super funds investing, foreign demand and a lack of supply."
Mr Kunnen said the lacklustre performance of the other capitals showed that nationally there is "no housing bubble".
While BIS Shrapnel's Angie Zigomanis is not predicting a dramatic 'pop' in house prices, he said Sydney's strongest growth had passed.
"You are not going to get double-digit price growth forever," he said.
"Things will slow eventually. . . particularly when interest rates start rising."
Melbourne's growth in 2015 has been sluggish with prices up just 0.6 per cent over the March quarter.
However, Domain Group senior economist Dr Andrew Wilson has a bullish outlook for Melbourne and Sydney.
"Given the record Autumn auction markets we have seen in both cities, I would expect higher prices growth over the June quarter," he said.
Dr Wilson said in 2015 we could see 15 per cent price growth in Sydney and 7 per cent in Melbourne.
Canberra was the nation's second best performer over the March quarter with prices up 1.1 per cent, followed by Adelaide (0.7 per cent), Hobart (0.5 per cent), and Brisbane (0.4 per cent)
Prices in Darwin and Perth fell over the quarter by 0.2 per cent and 0.1 per cent respectively.
Mr Kunnen said Australia had moved from being a two-speed market to a three-speed market, "because two of our cities are in reverse".
"Perth's population growth is down and Darwin is facing the same issue to it is not suprisingly to see those markets are falling."
Sydney's standout performance dragged the weighted average of the capitals up to 1.6 per cent, slightly down on the 1.9 per cent recorded over the December quarter.
The latest quarterly surge brings Sydney's annual growth to 13.1 per cent.
Melbourne's annual growth is sitting at 4.7 per cent while Brisbane has grown by 3.9 per cent.
AMP Capital senior economist Shane Oliver said the disaparity between Sydney and the other capitals was "quite sobering considering we have record-low interest rates".
"You would struggle to call any of the other cities a bubble," he said.
"Though Sydney does have symptoms of a bubble."
The value of Australian real estate also jumped from $5.4 trillion to $5.5 trillion while the average price of an Australian home jumped from $571,500 in December to $576,100 in March.
23 June 2015