Canberra house prices fall 5% in June quarter as nationwide prices are up 1.4%: REIA

Median house price across Australia's eight capital cities increased by 1.4% over the June quarter to a median of $519,768, according to the latest Real Estate Institute of Australia (REIA) Market Facts report compiled in collaboration with Bendigo Bank.

For the year to June capital city house prices are still down 3.1%, according to REIA calculations.

Canberra was the only capital city where house prices fell over the three months from April to June, recording a 5% drop to a median of $494,125, while Perth house prices were unchanged at $475,000 and Sydney house prices changed little, up 0.2% to a median of $642,425.

In its June quarter capital city house price update, the ABS recorded a 1.3% fall in Canberra house prices, compared with a 0.5% rise nationally.

Housing Industry Association ACT executive director Neil Evans said at the time that cheaper Canberra house prices might indicate that Canberra now had the right number of houses for its population.

''It's a difficult thing to pinpoint, but one thing I think is a major player … is when supply meets demand you might get drops,'' he told the Canberra Times.

In contrast to falling house prices, unit prices were up 2.4% over the quarter, with the REIA’s ACT institute pointing to a growing propensity among professional couples and singles to choose to live in an apartment complex.

The REIA recorded median house price decreases in all zones in the ACT, with the largest decline evident in the high-end inner-central zone – comprising Canberra North and Canberra South – down by 9.7% to a median of $650,000

Year-on-year, the inner central zone also recorded the largest drop of 12.2%.

The inner-south zone, comprising the Canberra suburbs of Woden and Weston Creek, fell 4.3% to $574,000; the west and north zone comprising Belconnen, Gungahlin and Hall fell 6.3% to $450,000, and the outer-south zone incorporating Tuggeranong fell 1.5% to $480,000.

Click to enlarge

Melbourne house prices rose 2.9% to $535,000, while Brisbane managed a gain of 1.9% ($433,000) and Adelaide up 3.4% to a median house price of $395,000.

There were solid house price gains among the smaller capital city housing markets, with Hobart up 4.8% to a median $370,000 and Darwin house prices up 3.6% to $570,000.

Click to enlarge

Hobart and Darwin were the strongest-performing unit markets over the quarter, registering gains of 5.9% and 4.8% respectively as the weighted average median unit price increased by 0.6% over the quarter to $429,558.

Among the larger capital cities, Brisbane was the strongest capital city unit market, registering a gain of 3.2% to a median of $376,500, with Melbourne unit prices up 1.9% to $450,000.

Click to enlarge

REIA president Pamela Bennett says the national house price gain of 1.4% over the quarter was “good news for investors too with improving yields thanks to tight vacancy factors and the impact on rental returns coupled with lower borrowing costs”.

“Every capital city with the exception of Adelaide and Hobart experienced strong demand for rental accommodation during the June quarter. National vacancy rates remain low.

“While economists keep a close eye on overseas markets and in particular the Euro crisis, in Australia, a turning point seems to have been reached and the overall mood for the housing sector is one of quiet confidence,” says Bennett.

Bendigo and Adelaide Bank’s executive for retail, Dennis Bice, says the report shows there has been growth across a number of market sectors.

“The results underscore the old property adage that there really are ‘markets within markets’ both at different levels in different cities and in regional centres around the states and territories where good value and solid returns can still be found,” he says.

The report was compiled based on figures supplied by the state and territory real estate institutes, Australian Property Monitors and various state government housing and land departments.