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Domain says Sydney has seen the strongest annual growth of all the state capitals for the sixth consecutive year, with median house prices increasing to the record high of $1.1 million.
According to the Domain Rental and House Price Report for the December quarter, the median house price for Sydney increased by 4.7 per cent during the period to $1,123,991.
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The city posted the most significant annual growth of all the state capitals, with its median house price rising by 10.7 per cent year-on-year.
Its unit prices also grew by 2.9 per cent over the December quarter to $711,256. Unit prices grew by 6.3 per cent during the year, which was the highest annual rate of growth across all the capitals.
Commenting on the results, Domain chief economist Dr Andrew Wilson said, “Sydney house price growth rates have increased over every quarter in 2016, with the median house price now over $1,100,000 and unit prices exceeding $700,000.”
“The December quarter result was clearly the highest of the year and a significant turnaround on the 3.0 per cent fall in prices recorded over December 2015,” he added.
Hobart’s house prices also performed strongly over the quarter, increasing by 6.2 per cent to $382,888. This was closely followed by Canberra, which posted a quarter-on-quarter jump in house prices of 5.6 per cent to $684,395.
House prices in Melbourne also grew by 3.6 per cent to $795,447, in Brisbane by 2.3 per cent to $540,758 and in Adelaide by 1.0 per cent to $501,166.
Meanwhile, house prices in Perth and Darwin dropped by 0.5 per cent during the quarter to $573,766 and $591,167 respectively.
Dr Wilson remarked that capital city housing markets ended 2016 on “the front foot” as most capitals recorded their best quarterly results of the year.
“Prices in the top performing markets of Melbourne and Sydney continue to grow, driven by surging migration and strong local economic performances,” he said. “Lower interest rates were the overarching stimulus for prices growth in 2016, with official cuts in May and August clearly revitalising housing markets.”
More neutral outcomes are likely for interest rates this year, according to Dr Wilson, which he said suggests that house price growth in capital city housing markets will steady.
“Overall, prices continued to increase in the latter half of 2016, however, it’s likely that capital city markets will grow on a smaller scale in 2017, as key drivers of strong house price increases in top performing markets diminish,” he concluded.
[Related: Median Sydney house prices now over $1.05m]
