National housing market starts to recover
The new figures come as a senior Reserve Bank of Australia official cautioned on Tuesday that market conditions were shifting to a "new normal" where price growth would be slower than the country had witnessed over the past 30 years.
In these changed conditions, home owners should expect to see more periods when prices are falling, albeit only "mildly". The RBA also warned that banks should not loosen lending standards in a bid to "bring back the boom times" to boost profits.
Meanwhile, Australian Property Monitors said the national median house price rose 1.7 per cent in the March quarter, its second consecutive quarterly increase.
"The national housing market has recorded its best start to a year since the strong market conditions of 2010," said APM senior economist Andrew Wilson.
Sydney's median house price rose 1.6 per cent to hit a new peak of $673,681, with that market now recovered and entering an "expansionary" phase, according to the Fairfax-owned analyst group.
Melbourne posted the strongest performance of any capital city after house prices rose 3.6 per cent to $538,922 in just three months. While it was the highest growth rate recorded since March 2010, the city's median still remains 4.2 per cent below its peak.
House prices also rose 1.8 per cent in Darwin, 1.3 per cent in Perth and 0.5 per cent in Brisbane.
Dr Wilson said the market remained "patchy" in the smaller capitals. House prices fell in Adelaide and Canberra.
cvedelago@theage.com.au
Frequently Asked Questions about this Article…
The article says Australia’s housing market appears to be in the midst of a recovery, with prices rising at their strongest level for more than two years in many capital cities. Australian Property Monitors reported a second consecutive quarterly increase in the national median house price for the March quarter.
According to Australian Property Monitors, the national median house price rose 1.7 per cent in the March quarter, marking its second consecutive quarterly increase.
Melbourne posted the strongest performance, with house prices up 3.6 per cent to $538,922 in three months. Sydney’s median rose 1.6 per cent to a new peak of $673,681. Other gains included Darwin (up 1.8 per cent), Perth (up 1.3 per cent) and Brisbane (up 0.5 per cent).
Yes. The article notes that house prices fell in Adelaide and Canberra, and that the market remains “patchy” in the smaller capital cities, according to APM senior economist Andrew Wilson.
A senior RBA official cautioned that market conditions are shifting to a “new normal,” where price growth is likely to be slower than over the past 30 years. The RBA warned that home owners should expect more periods when prices fall, albeit only “mildly,” and that banks should not loosen lending standards to try to revive boom-time profits.
Per the article and the RBA’s comment, the “new normal” implies slower long-term price growth and more frequent—but generally mild—periods of declining prices, rather than the stronger, sustained rises seen over previous decades.
Australian Property Monitors said the national housing market has recorded its best start to a year since the strong market conditions of 2010. Melbourne’s three-month growth was the highest rate recorded since March 2010, although Melbourne’s median still remains 4.2 per cent below its previous peak.
Based on the article, everyday investors and homeowners should watch city-by-city differences (since some capitals are rising while others fall), monitor quarterly price trends like the 1.7 per cent national rise in March, and note the RBA’s warning about a slower “new normal” and the risks of relaxed lending standards by banks.
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