According to the latest CoreLogic Hedonic Home Value Index, most capital city housing markets experienced new gains last month, taking the current growth phase into its 52nd month. Australian house prices rose 2.9% through Q3, a modest slowdown from the sharp 3.8% lift in Q2.

Growth conditions varied significantly from region to region. Melbourne took the lead in growth over Sydney during the September quarter, as the latter’s booming property market had cooled a little. Dwelling values were pushed 5.0% higher over the third calendar quarter in Melbourne, largely due to a strong rise in house values (+5.2%). This balanced a softer result for the unit market (+2.9%).

Canberra had the second highest rate of growth over the quarter, with values up 4.5%, followed by Sydney, with values up 3.5% (down from 6.8% in June).

From the start of the year to Sept. 30, Sydney’s prices topped all other capital cities with a growth rate of 10.2%. Canberra had the second highest growth rate nationally, up 4.5%, while Brisbane experienced a slight fall of -0.3% in Q3.

Overall, dwelling values in Australian capital cities rose 1% in September, 2.9% for the quarter, and 7.1% on an annual basis. Since the latest property boom began in June 2012, capital city dwelling values have risen to 41.3%. Moreover, the average dwelling price is now $575,000, largely due to the rise in Sydney’s median valuation to $785,000.  

“The housing market has clearly been a substantial source of wealth creation for many Australians, particularly for homeowners in Sydney and Melbourne,” said Tim Lawless, CoreLogic head of research Asia Pacific.

“Since the end of 2008, Sydney dwelling values increased by almost 95 per cent and Melbourne dwelling values are up 80 per cent. Canberra is the only other housing market where the cumulative capital gain has been greater than 20 per cent post-GFC.”