Despite the rapidly increasing interest rates, the property market remains stubbornly resilient, new data has showed.
The latest RP Data - Rismark Property Value Indices report showed that house values climbed by 13.97% during the 12 months ending January 2008 - a sharp contrast with the share market performance which saw the S&P ASX 200 Index falling by 2.13%.
Tim Lawless, RP Data's research director, said that with national house values now approaching $500,000 for the average family home, a further 1.1% increase will potentially confirm this.
"The ongoing rise in property prices is great news for property owners and investors who are now around $60,000 richer over the year," he said. "On the flipside, buyers already struggling to meet housing market price increases are likely to see their opportunities lost."
As a result of the worsening housing affordability crisis, Lawless said the unit market is likely to see strong growth as buyers look for cheaper entry points into the property market. Nationally, units have been appreciating at a faster rate than houses, jumping by 16.31%, boosted by surging demand particularly in the inner-city areas.
Adelaide continued to outperform the rest of Australia, with house values rising to $416,870 - an increase of $86,799. Brisbane dwelling values rose 23.34%, while Melbourne values climbed by 22.97%. Sydney stayed on its course to recovery with dwelling values rising by 8.39%, while Perth continued to languish with just a 0.84% increase in values.
"The resilience of the Australian residential property market in spite of the seven interest rate hikes since March 2005 has been remarkable," said Christopher Joye, CEO, Rismark International. "Ironically, the RBA's contradictory monetary policy stance has only served to exacerbate the housing supply constraints that are underpinning the price growth."