Revisions help Melbourne house prices rise 5% in June quarter as Sydney, Perth and Canberra record new peaks: APM

Melbourne was the strongest performing capital city housing market over the June quarter with house prices rising 5% to $553,447 to sit just 1.4% below their previous peak recorded in June 2010, according to figures compiled by Australian Property Monitors (APM).

Sydney, Perth and Canberra all recorded record-high median house prices over June.

However, the results suggest a two-speed housing market. with little momentum in house prices recorded for Brisbane, Adelaide and Hobart.

The “volatile” Darwin housing market fell by 2.1% in the June quarter – the only capital city housing market to record a fall in its median house price over this period.

The overall result was a 2.8% rise in the national house price over the June quarter - the best result since March 2010.

It was also the third consecutive quarterly rise in the national house price, which at $564,325 is now at an all-time high and according to APM, and has "clearly fully recovered from the correction phase of 2011".

APM has Melbourne house prices up 5% to a median of $553,447 from $527,245 in the March quarter and up 6.1% year-on-year.

This follows substantial downward revisions of the previous March quarter Melbourne median house price of $538,922.

Had the figure not been revised, Melbourne house prices would have gained around 2.6% over the quarter.

It follows the Real Estate Institute of Victoria (REIV) recording a much more modest 2.4% rise in Melbourne house over the same time frame, but also only possible due to a preliminary March median house price being revised down sharply from $561,500 to $549,000.

However, the REIV has a stronger annual gain of 8.4% for Melbourne house prices compared with 6.1% rise recorded by APM.

Perth was the next strongest performer over the quarter with its median house price rising 3.2% to $584,487 andis  also the strongest performer over the year with a 7.5% gain.

There was a small upward revision in the Perth March quarter median from $565,152 to $566,601.

APM has Sydney house prices up 2.7% over the quarter and 6.1% over the year to a median of $694,064 from $672,209 in the March quarter, slightly down on an earlier March figure of $673,681.

Canberra was the only other capital city to record a noteworthy rise in its median house price – up 1.8% from $565,969 in March to $576,248 in June. APM had advised a previous March quarter median of $567,768.

“Australian housing markets have recorded significant rises in house prices over the June quarter, propelled by the lowest interest rates in decades, rising confidence and continued generally solid economic performances,” says Andrew Wilson, senior economist at APM.

“Buyer activity in most capital city housing markets is now charging towards record levels with the fastest prices growth since the government-stimulated house price boom of 2009 and 2010.”

He notes that buyer activity in Melbourne is “consistently solid through most price brackets, buyer types and suburban regions”.

“The results in Sydney and Melbourne are not surprising and are in line with previous forecasts and analysis, particularly with reference to price growth correlation with auction clearance rate data which has proven to be an accurate guide to the general level of house and unit prices growth in those markets.

“Other indicators including ABS housing loan data also provided solid guides to the June quarter house price outcomes,” he says.

“The Brisbane market continues to consistently record quarterly house price growth albeit at a slow pace with buyer activity impeded by a still underperforming local economy.

Wilson says Perth’s housing market continues to surge on the back of “high levels of immigration and a still strong local economy”.