Sydney house prices have achieved double-digit annual price growth a second time in two months, according to a report from CoreLogic RP Data.

House prices in Sydney have risen 10.6% in the past 12 months, despite hopes they would be capped at below 10% in predictions made by property experts in 2015. Last month, prices rose 10.2% year-on-year. Moreover, the city’s median dwelling price is now $800,000 – the highest among the capital cities.  

Detached houses (+10.9%) are showing only a slightly higher rate of capital gain compared with units (+9.1%). This highlights the healthier supply versus demand dynamic that exists across the Sydney region for higher density housing. “This also points to higher demand for Sydney units considering how expensive Sydney houses have become. Units generally provide a more affordable option for home ownership and investment for many buyers,” said Tim Lawless, head of research at CoreLogic RP Data.

The only other time house prices reached double-digit growth in 2016, aside from September and October, was  in January (10.5%). The return to double-digit growth has heightened the growing issue of housing affordability in Sydney.

"While home values are still rising, the rate of growth is slower than it was 12 months ago. However, annual growth remains somewhat heightened, particularly considering this growth phase has now been running for almost four-and-a-half years," said Lawless.

"With ongoing strong value growth and high clearance rates in Sydney and Melbourne, as well as debate around affordability gathering some momentum, there is likely to be further caution by the Reserve Bank around future interest rate cuts, which, if it were to occur, may provide additional stimulus for housing markets around Australia."