Australian capital city house prices are rising at their greatest pace in three years.

Mid-level properties are making the most gains, with Sydney by far the fastest growing market.

House prices in Australia’s capital cities rose by an average of 1.3 per cent in October, although Perth, Hobart and Canberra went backwards.

The 7.9 per cent annual growth pace was the fastest in three years, as the median capital city house price rose to $511,000, research from RP Data-Rismark shows.

St George Bank economist Besa Deda said a lack of new housing supply was driving prices higher, especially in NSW where Sydney’s median house price stands at $610,000.

“Low mortgage rates and pent-up demand are helping spur strong price growth in housing,” she said.

“Not surprisingly then, Sydney is also where house price growth is strongest.”

Commonwealth Bank economist Gareth Aird said home owners were feeling the positive wealth effects of owning a piece of real estate.

 

MEDIAN HOME PRICES ACROSS AUSTRALIA IN OCTOBER:

  • Sydney rose 2.4% to $610,000
  • Melbourne rose 1.2% to $538,000
  • Darwin rose 1.6% to $520,000
  • Canberra fell 1.5% to $508,250
  • Perth fell 0.2% to $493,000
  • Brisbane rose 1.4% to $429,000
  • Adelaide rose 0.3% to $375,000
  • Hobart fell 2.3% to $303,000

 

By Stephen Johnson