Michael Bleby| Australian Financial Review| 17 September 2019
Sydney’s median house price rose to $875,000 in the June quarter, marking the first increase in a year as buyers returned to the market after the federal election and greater optimism about prospects for the property market.
The higher median price – up from $870,000 in the previous three months – was accompanied by a slight gain in the median house price in Brisbane and stronger gains in Hobart and the ACT. The rise, however, failed to arrest a steady decline in Sydney’s residential index for detached homes, which fell for a sixth straight quarter, the Australian Bureau of Statistics said on Tuesday.
On a national level, prices for detached dwellings fell 0.6 per cent, much less than the 3.1 per cent quarterly drop in March, while the rate of decline for attached dwellings – apartments, townhouses and semi-detached dwellings – eased to 0.8 per cent from 3 per cent, the ABS report showed.
The official figures reflect a picture already painted by private data provider CoreLogic of a June that was a “turning point” for the east coast-dominated housing market, which returned to growth in June.
However, ABS’ median price figures, based on data from state land registries, refer to the price shared by the largest number of dwellings along a price curve and are different from the average price. They are a better indicator of the real-life price faced by buyers.
The report also reinforces that the housing market, subsequently reinvigorated by two RBA rate cuts and lower mortgage-serviceability requirements, has much ground to make up as it recovers from a boom market in which Sydney’s median house price soared to $1,050,000 and Melbourne’s median price – which held in the June quarter at $680,000 – rose to $750,300.
Sydney’s median apartment price fell to $690,000 from $694,000 in the March quarter; Melbourne, where the median flat price rose to $535,000 from $515,000, and Darwin, up to $312,000 from $302,500, were the capitals to see an increase in apartment prices over the period, ABS said.
While the appetite for mortgages remains strong – mortgage brokers said last week July’s strong demand was persisting – the current mini-boom may not be strong enough to stimulate the wider economy.
Auction clearances paused in their recent upward run, preliminary figures from last week show, and investment bank UBS last week said the current stronger conditions may not be enough to fuel a lasting boom like the one enjoyed in 2012-2017.