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Strong price growth in Australia’s two big cities has disguised the fact that other markets are much more subdued.
Dwelling values in Australia’s eight capitals grew by an average of 10.1 per cent in 2013/2014, according to the RP Data-Rismark Home Value Index.
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However, that result was largely driven by Sydney, which grew at 15.4 per cent over the year, and Melbourne, which added 9.4 per cent.
The next best performers were Brisbane with 7 per cent, Darwin with 5.7 per cent and Perth with 5.2 per cent.
Growth was sluggish in Australia’s other three capitals, with Adelaide and Canberra values increasing by 2.9 per cent each and Hobart values rising by 2.5 per cent.
RP Data research director Tim Lawless said the volatility of the index over the past few months should be ignored in favour of the longer-term trend.
“It shows that the quarterly rate of growth peaked across the Australian housing market in August last year at four per cent,” he said.
“Since that time, the rate of capital gain has generally trended towards a more sustainable level.
“The slowdown in dwelling value appreciation will be a welcome relief to policymakers and those seeking to buy into the housing market.”
Mr Lawless said housing values were unlikely to slide while interest rates remained low.
“What is more likely is that natural affordability constraints will start to dent buyer demand, as will the low rental yield scenarios that are very much evident across the largest capital cities of Melbourne and Sydney,” he said.
[Related: RP Data-Rismark index for May]
