Real estate values up four per cent over December quarter, the biggest quarterly rise since 2009
Average dwelling values across the country rose 1.1 per cent over December and 2.3 per cent over 2019, according to property data firm CoreLogic.
The jump, led by Sydney narrowly edging out Melbourne again, reflects a four per cent quarterly rise in values, the highest quarterly increase since November 2009.
The 1.1 per cent increase was a slight slowdown from the previous two months where national dwelling values rose 1.7 per cent in November and 1.2 per cent in October.
Sydney led the way again in December, with a 1.7 per cent rise in dwelling values, over Melbourne's 1.4 per cent.
CoreLogic head of research Tim Lawless said the slight reduction in dwelling values increases would suggest that the pace of capital gains may have been dampened by higher advertised stock levels or worsening affordability pressures through early summer.
“The positive year-end results mask what has been a year of two distinct halves -we saw capital city dwelling values fall by 3.8% over the first six months of 2019 and then rebound by 7.0% over the second half of the year.
“The housing value rebound was spurred on by lower mortgage rates, a relaxation in borrower serviceability assessments, improved housing affordability and renewed certainty around property taxation policies post the federal election.
"Lower advertised stock levels persisted providing additional upwards pressure on prices amidst rising buyer activity.”
Breaking it down in to houses and apartments, houses drove the value increase in Sydney and Melbourne.
Sydney houses, after recording a three per cent gain in November, saw a two per cent rise in December, where Melbourne, who had a 2.4 per cent gain in November, saw a 1.7 per cent rise in December.
Hobart house values dropped 0.2 per cent, a stark contrast to unit values which rose 1.9 per cent.
Perth values were steady across houses and units after recording an increase last month for the first time in two years.
Apartment gains also slowed a touch, Sydney up one per cent after 1.8 per cent gains in November, and Melbourne's apartment values rose less than one per cent for the first time since prices started bouncing back in July.
Dwelling values at the end of 2019 are 3.1 per cent below their record highs in October 2017.
Sydney and Melbourne recorded the highest annual capital gain, with both cities posting a 5.3 per cent rise in dwelling values over the year.
“A nominal recovery in housing values implies home owners are becoming wealthier, which may also help to support household spending," Tim Lawless added.
"However, the flipside is that housing affordability is set to deteriorate even further as dwelling values outpace growth in household incomes, signaling a set-back for those saving for a deposit.”
Five of the eight capital cities ended the year with price rises.