Capital city house prices are coming off the boil, but Sydney continues to boom.
Sydney property prices jumped almost 15 per cent in the year to September, according to figures from the Australian Bureau of Statistics on Tuesday.
The gains in the harbour city were double those in Melbourne and Brisbane, and seven times those in Canberra.
Capital city house prices overall rose nine per cent in the year, having slowed from the 10 per cent annual rise in the June quarter.
Prices rose 1.5 per cent in the September quarter, compared with 1.9 per cent in the previous three months.
JP Morgan economist Tom Kennedy said national house prices were slowing to more sustainable levels.
“The growth we saw last year can’t be sustained and that could lead to problems if it did,” he said.
“The fact that we’ve slowed down is probably a good thing and we think it’ll probably slow down a little more.”
Perth was the only capital city to experience price falls in the quarter, down 0.1 per cent.
Easing mining investment has dampened demand for labour, slowing population growth and, therefore, house price growth, Mr Kennedy said.
Housing Industry Association senior economist Shane Garrett said national home price growth was easing to a more sustainable rate, as more supply came into the market.
“The annual rate of home price growth nationally is back in single figures for the first time in a year,” he said.
“At the same time, new home building is stretching to its busiest year in two decades. This is no coincidence.”
Commonwealth Bank senior economist Michael Workman said an increase in housing supply over the next year would slow house price growth in Sydney, Melbourne and Brisbane.
“It’s quite clear in most of the data that it’s the eastern seaboard where most of the activity, price wise, is occurring,” Mr Workman said.
“It’s also where most of the new building is underway and there’s a lot of new stock coming over the next year, so there will be this change in the market that will dampen house price growth over the coming year.
“By this time next year, the numbers will be quite low compared to where they are right now.”
He said some parts of the housing market, such as the Gold Coast, would benefit as the lower Australian dollar would eventually boost tourism.
CAPITAL CITY HOUSE PRICES IN THE YEAR TO SEPTEMBER:
- Sydney – rose 14.6pct
- Melbourne – rose 6.9pct
- Brisbane – rose 6.7pct
- Adelaide – rose 5.6pct
- Perth – rose 3.7pct
- Hobart – rose 4.3pct
- Darwin – rose 3.4pct
- Canberra – rose 2.4pct
Source: Australian Bureau of Statistics