Pricing consolidation now underway across housing sector: Commsec

A slow down in price growth is occurring, with a consolidation now underway across the housing sector, according to Commsec’s chief economist Craig James.

In his most recent investor signposts Commsec Research, James noted that “For those who have been fretting that the upward ascent of home prices had come to an end, there is good news”.

This good news is that house prices did advance, but at a sustainable rate.

“Over June, home prices advanced, but at a sustainable rate, highlighting the consolidation now underway across the housing sector,” he said.

“On current data from RP Data, home prices across mainland states capital cities have lifted by 0.8 per cent so far in June after retreating 1.9 per cent in May. Over the past year, home prices have been rising by around 0.9 per cent a month, although average growth over the past four months has been far slower at 0.2 per cent per month.”

In Perth, they led the June gains – up 1.3%. This was closely followed by Brisbane and the Gold Coast – both up 1.2%. Sydney and Melbourne are up 1.1% and 0.4% respectively.

Adelaide prices have fallen 0.5% thus far in June.

Sydney still leads the way over the year, recording annual growth of 15.7%, noted James, with Melbourne up 9.2%.

However, the slow down is expected to continue.

“Annual growth of home prices will continue to soften over 2014/15 as the construction of houses and apartment is completed, adding to the supply of available homes,” he noted.