No national property boom (yet), but encouraging growth in many markets

There are multiple messages in dwelling price data from Australian Property Monitors, including evidence that we have rising markets but not a boom – not yet, anyway.

Sydney is now the price growth leader of capital city Australia, both for apartments and houses. APM’s figures give Sydney an annual rise of 11.7% for houses and 10.2% for units.

The next best is Perth (up 8.6%) for houses and Darwin (up 8.2%) for units.

To put that into perspective, in mid-2010 every capital city had double-digit annual price growth, including two cities that were above 20%. That was a boom, thought not a bubble, given that the subsequent price decline in 2011 and 2012 was relatively minor – and now prices are rising again.

The overall growth is still quite moderate, with Canberra, Brisbane and Adelaide all with annual house price growth below 3% and Hobart around 5%.

With apartments, the APM figures record median price decline in six of the eight capital cities in the September quarter. The only exceptions were Darwin and Sydney.

In annual terms, all cities except Brisbane have median unit prices higher than year ago, but only Sydney and Darwin have annual price growth above 7%. Melbourne, Brisbane, Canberra and Adelaide are delivering little or no growth in median unit prices.

These figures, looked at overall, are a reminder that the headlines about markets going ballistic are coming out of Sydney, where some sections of the house market are indulging an auction frenzy.

We do not (yet) have a national property boom, although we do have encouraging growth in many of the major markets, as well as some regional markets.

It highlights once again how much the residential property industry needs balanced reporting from people with expertise and experience. Given that major media businesses are sacking rather than nurturing editorial talent, we are unlikely to ever get calm reasoned coverage of real estate in metropolitan newspapers.

There are multiple reasons why Sydney is currently displaying faster price growth than other cities, including the reality that Sydney has some catching up to do.

Before 2013, Sydney had been the chronic under-achiever of the major property markets, with 10 years of mostly sub-par performance. Its economy had been ordinary, its government had been dreadful and there was a marked absence of infrastructure development.

Most Sydney suburbs have averaged just 3-4% in annual price growth since 2003. You have to go to drought-stricken one-horse towns to find worse price performance.

Those who cling to the notion that Sydney is always the best place to buy, and that the trendy suburbs beside the CBD or the beaches are the best places to invest, will take the recent upturn as confirmation of their entrenched attitudes.

But the million-dollar suburbs of Sydney will have to deliver a lot more growth to make up for the past 10 ordinary years.

Terry Ryder is the founder of hotspotting.com.au and you can contact Terry via email or on Twitter.