Australian House Prices Rebound

Posted on July 4th, 2013 · Posted in News

After two surprisingly weak months, house prices have rebounded strongly in June, rising by 1.9% to be up 3.8% over the year. During June  gains were particularly strong in Sydney (+2.7%), Melbourne (+2.3%) and Perth (+1.7%).

While property market conditions have improved in most capital cities, Sydney and Perth are clearly the front runners, buoyed by solid property market fundamentals and robust state economic growth.

Up until June, the growth in home prices had been surprisingly subdued, given the strength in auction sales and clearance rates.  However, home prices are now clearly recovering from the lows experienced in recent years supported by improved affordability that has released some of what was previously ‘pent up’ home buyer demand.

Tightening housing market conditions and improved affordability will likely support further home price gains in the year ahead and with interest rates expected to remain at low levels for an extended period home buyers are presented with a good opportunity to enter the market at relatively attractive price levels.

A growing recognition that home prices passed their lowest point in mid-2012, combined with sharply improved home buyer sentiment and affordability should support ongoing moderate price gains in the year ahead.

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