Brisbane and Perth steam ahead as house prices hit record highs

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Property buyers snapped up houses in Brisbane and Perth, largely ignoring the August rate rise according to a Residex report.

For the first time, house prices in Brisbane have pushed through the $400,000 barrier to $403,500, while Perth has exceeded its previous highs - property values jumped by 2.02% to $504,500 in the three months ending August.

House values in the ACT rose 1.40% to $425,500. Melbourne houses added 3.72% in capital growth to $425,000, while Darwin climbed by 3.79% to $389,000. Sydney houses managed a slight increase of 0.21% to $559,000.

"This month will go down in Australia's history as the month when a typical house in two capital cities exceeded half a million with three other capital cities having typical housing cost in excess of $400,000," said John Edwards, CEO of Residex.

Strong demand for units boosted capital growth in the ACT by 5.08% to $336,500 in the three months ending August, while Darwin surged by 7.57% to $293,500. Units in Sydney attracted steady demand with unit values rising by 1.97% to $387,500 in the same period.

Rental returns across the country continued to climb due to high demand and tight supply of rental properties. Rent for Brisbane houses climbed by 11.86% in the 12 months ending August to $330 per week, while units earned $295 per week, or an increase of 13.46%.

Investors in Perth saw house rents increase by 30.61% to $320 in the same period, Sydney rents rose by 21.62% to $450 and Melbourne climbed by 20% to $330 per week.

Unit investment owners in Perth enjoyed the country's biggest rental increase of 36.36% to $300 per week, ACT surged by 22.73% to $405, Melbourne rose by 23.40% to $290 and Sydney gained 18.75% to reach $380 in the 12 months ending August.
"Given the current rental yield and stock shortages in the Sydney market, it's very unlikely that the historical peak will not be significantly passed. We're expecting the yearly rise to exceed $80 per week," said Edwards.

Sales activity has also picked up across all cities, led by the unit market in the ACT with a 58% increase in the medium-density sales activity.

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