The latest real estate data indicates housing values hit record highs last month on the back of vigorous growth in Australia’s two biggest cities.
Data released by real estate industry company RP Data Rismark indicates that home values in Australia’s capital cities in September surpassed the highs of the 2010 property boom.
At the end of September, housing values in capital cities were 0.7 per cent higher than the record levels reached in October 2010.
Sydney and Melbourne led gains, with home values in Australia’s most populous city rising 2.5 per cent during the month while also gaining 5.2 per cent over the September quarter.
Melbourne saw gains in housing values almost on par with those in Sydney, rising 2.4 per cent in September, or five per cent over the quarter.
Tim Lawless, research director for RP Data, told Fairfax Media that these levels are almost unprecedented since the start of the new decade.
“We haven’t seen market conditions this strong since April 2009 for Sydney and May 2010,” he said.
These robust gains were confined to the country’s two largest markets, however. Home values in Hobart and Darwin actually fell by two per cent and 2.5 per cent respectively, while in Canberra they edged down by 0.7 per cent.
Adelaide and Brisbane housing values enjoyed moderate growth. Brisbane’s values gained 1.1 per cent over the past year, while in Adelaide they rose 1.1 per cent during the month.
Lawless said gains in the Sydney market are part of a “technical” recovery, prompted by a weak, long-term cycle. This has keyed a 10 per cent gain in first nine months of the year.
“Over the past 10 years value have only risen by an annual rate of about 2.5 per cent. So in many ways Sydney’s playing catch up at the moment,” he said.
Lawless further pointed out that much of the growth in Australia’s housing market is focused in Sydney and is heavily driven by investors as opposed to first home buyers.
RP Data’s research indicates around 40 per cent of purchases in Sydney are being made by property investors, making the current cycle far more speculative than the 2009 boom which was drive by first home buyers.