Strong auction clearance rates have boosted Sydney and Melbourne’s home prices with the latter recording the strongest growth among the capital cities in the past three months.
Melbourne's home prices rose five per cent during the September quarter after a strong lift in house values offset softer growth in apartment prices.
Canberra had the second highest price growth, with a 4.5 per cent rise, for the quarter, followed by Sydney with 3.5 per cent, figures from market analysis firm CoreLogic show.
The weakest housing market for the quarter was Darwin where home values fell 4.5 per cent while Perth and Brisbane also slipped, by 3.2 per cent and 0.3 per cent, respectively.
Darwin's values are now roughly what they were seven years ago, while Perth's prices match 2007 levels.
The combined capital city index, which is heavily weighted towards Sydney and Melbourne, rose 2.9 per cent over the past three months with a month-on-month gain of one per cent.
CoreLogic head of research Tim Lawless said that since the end of 2008, Sydney dwelling values were up almost 95 per cent and Melbourne's values were up 80 per cent.
He said Melbourne and Sydney's price growth continued to be supported by high auction clearance rates which are at their strongest levels since the June 2015 quarter.
Sydney auction clearance rates were above 80 per cent throughout September, while Melbourne's was above 75 per cent.
Mr Lawless said both cities had far fewer homes up for sale with Sydney's for sale ad levels less than half of what they were five years ago.
"Reduced stock levels create urgency in the market, adding to the upwards pressure on dwelling values," he said.
Conversely, Perth and Darwin have had more homes on the market plus a slowdown in migration rates.
Home prices in regional Australia have slipped with the weakest conditions recorded in regional WA where house values have fallen 12.4 per cent over the past 12 months.
Mr Lawless said rental yields had not performed so well.
"While we've seen values remain relatively strong, in contrast, rental yields have been in the doldrums due to the fact that residential property values are rising at a faster rate," he said.
MEDIAN HOUSE PRICES FOR SEPTEMBER 30:
- Sydney: $785,000; quarter +3.5pct; year +10.2pct
- Melbourne: $590,000; quarter +5pct; year +9pct
- Brisbane: $470,000;, quarter -0.3pct; year +3pct
- Adelaide: $418,000; quarter +2.6pct; year +6.5pct
- Perth: $480,000; quarter -3.2 pct; year -7pct
- Hobart: $325,000; quarter +0.4pct; year +8.7pct
- Darwin: $480,000; quarter -4.5pct; year -6pct
- Canberra: $556,800; quarter +4.5pct; year +9pct
- Combined capital cities: $575,000; quarter +2.9pct; year +7.1pct
- Regions: $370,000; quarter -1.1pct; year +1.4pct