Property prices up 4.2% in March quarter

Property prices ware up by 4.2 per cent across capital cities in the March quarter, a new survey says.

The RP Data – Rismark Hedonic Home Value index, released on Friday, said property prices in the capital cities rose by an average 12.5 per cent in the year to March 31.

Rismark chief executive Christopher Joye said the housing market remained resilient despite recent rate rises by the Reserve Bank of Australia (RBA).

The central bank has lifted the cash rate from 3.0 to 4.25 per cent since October 2009.

“The lively capital growth observed in the major cities runs against the grain of relatively anaemic housing finance flows,” Mr Joye said in a statement.

“This implies that underlying demand- and supply-side fundamental are driving Australia’s housing rebound, as opposed to simply credit.”

Darwin remained the top performing city, with home values up 6.9 per cent in the March quarter for an annual rise of 20.2 per cent.

Melbourne was next with a quarterly rise of 6.0 per cent for an annual rate of 18.7 per cent.

Perth had the slowest quarterly rise, 0.7 per cent, while dwelling prices in Brisbane had the smallest annual increase of 6.7 per cent.

The average dwelling price across the capital cities was $450,000, with Canberra the dearest at $510,800, while Hobart was the cheapest at $323,750. director of research Tim Lawless said capital growth in housing is expected to slow this year as the RBA returns lending rates to long-term averages.

“Over the longer-term, home values should be expected to track disposable incomes,” Mr Lawless said.

Increases in home values outside the capital cities were more subdued, with an annual rise of 5.3 per cent.

“Capital city markets represent just 0.5 per cent of the national land mass but account for 60 per cent of home sales,” Mr Lawless said.

“The bulk of Australian population growth is concentrated in the capital cities, in turn driving housing demand.”

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