Sydney housing market strongest in last 20 years: Residex

While there is no great growth spurt in the property market, Sydney is performing at its best in 20 years says Residex chief executive John Edwards.

Sydney house prices are up 7.37% over the past 12 months to June with a median house price of $715,000 according to Residex calculations.

RP Data-Rismark has a Sydney median house value of $645,000 as of the end of July but almost identical year-on-year growth to July of 7.3%.

“That is the largest rate of growth we have seen in Sydney over the last 20 years and even over the last decade,” Edwards told Peter Switzer on Sky Business.

“You’ve got an 80% clearance rate [in Sydney],” added Edwards.

Sydney's annual growth is more than double the overall market performance with Residex recording 3.48% growth in national house prices over the year to June.

Residex figures show Perth performing even better with an 8.23% rise in its median house price over the past 12 months to $505,500.

RP Data-Rismark figures are similar, recording an 8.8% rise in Perth house values and with an almost identical median of $510,000.

Edwards attributed the rise in Perth to the resources boom and also to miners in the northern regional areas of Western Australia heading back to buy in the capital as the investment boom peaks – Residex records a 3.92% adjustment in regional WA house prices over the past quarter to $335,500 and a 2% fall over June.

Overall, WA mining towns are up just 1.2% over the past year – well below inflation.

Edwards says he expects a “period of adjustment in WA country areas”.

Residex has Melbourne house prices up 4.82% over the year to June to $582,500 with Edwards saying he was a little bit bemused as to the Melbourne performance.

“I don’t know quite what is going on there,” he told Peter Switzer.

RP Data-Rismark records similar annual growth for Melbourne, up 4.4% to July with a median house value of $530,000.

He has Brisbane up 6.37% over the past year to a median house price of $439,000 – out of synch with RP Data-Rismark which records annual growth to July of just 1% though with a similar median of $450,000

Edwards said the major regional cities in Queensland are doing rather well as are those more reliant on tourism such as Cairns, given the fall in the dollar.

“Mackay is suffering because the mining boom has come off, but it suffers less than Gladstone, because it has some offset through tourism,” he says.

Residex has the unit market not doing as well as houses up just 1.26% over the past year to June with Perth strongest at 5.43% and a median of $444,000 with more modest growth in Sydney (2.29%) and Melbourne (1.87%).

Brisbane unit prices fell 0.85% over the past 12 months but are up 0.8% over the June quarter, with Edwards suggesting the market may be “starting to come out of its slump”.

The relatively poor performance of units, says Edwards, is a function of supply “being brought too easily on to the market”