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Capital city home values remain 6.5 per cent below previous market peaks when adjusted for inflation, according to RP Data research.
RP Data research analyst Cameron Kusher said a volatile housing market has struggled to keep pace with increasing prices across the wider economy.
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“Inflation has continued to occur at a time when home value growth in most cities has failed to maintain pace,” he said.
“As a result, the cost of most other goods and services in the economy has risen at a faster pace than home values.”
As a result, Mr Kusher said housing is relatively more affordable.
Sydney home values are closest to their inflation adjusted peaks, sitting just 3.3 per cent below, while Hobart prices are currently 21.7 per cent below inflation adjusted peaks.
According to Mr Kusher, combined inflation adjusted figures only saw a turnaround in value growth over the past couple of quarters, whereas the non-adjusted figures have been increasing since June 2012.
