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Sydney house prices surge a record 12%
PETER MARTIN ECONOMICS CORRESPONDENT
January 1, 2010
SYDNEY house prices enter the new year at record highs after surging an extraordinary 12 per cent through 2009.
Land Titles Office figures compiled by the research company RP Data show a typical Sydney house that sold for $554,800 in early 2009 fetched between $500,000 and $655,000 towards the year's end.
The $655,000 figure - a record - is the median price for November. RP Data warned that median monthly prices were volatile and said a better guide was to examine a range of median prices over a number of months.
Sydney's price rise of 12 per cent in the 11 months to November more than offset the slide of 5 per cent during 2008 after the global financial crisis. It was eclipsed only by Melbourne's rise of 17 per cent, Darwin's 15 per cent and Hobart's 14 per cent. Prices in Brisbane and Perth rose a more modest 6 per cent.
The price of a typical Sydney unit increased 11 per cent to $435,000.
Importantly, prices continued to rise in October and November despite back-to-back interest rate rises in those months and the decrease in the first-home owners' grant towards the end of the year.
''First-home buyers have been trending down since peaking in May,'' RP Data's research director, Tim Lawless, said. ''But the gap is being filled by upgraders and investors who are much less sensitive [to price].''
Other credit figures showed borrowing for housing up 0.7 per cent in November and 8 per cent over the year.
The CommSec chief economist, Craig James, said the resilience of the housing market increased the chance of another interest rate rise when the Reserve Bank board meets in February.
''The main worry is that home prices are rising at unsustainable rates in some capital cities such as Darwin, Hobart and Melbourne,'' he said. ''The last thing anyone wants … is another boom-bust scenario … The main uncertainty for the bank is the extent to which the housing market slows in the new year following the latest rate hikes and the expiry of the home-buyers' boost.''
Mr Lawless said he expected more modest house price growth in 2010. '' We would expect conditions to moderate … but the primary driver of growth will continue to be an undersupply of housing, coupled with extraordinary demand fuelled by population growth.''
The sharemarket closed at its highest level all year last night. The S&P/ASX 200 finished at 4870.6, after opening the year at 3722. The rally, starting in March, lifted the market 54.6 per cent, well short of its high of 6851.
BIG MOVERS
The median price rises:
Melbourne 17 per cent
Darwin 15 per cent
Hobart 14 per cent
Sydney 12 per cent
PETER MARTIN ECONOMICS CORRESPONDENT
January 1, 2010
SYDNEY house prices enter the new year at record highs after surging an extraordinary 12 per cent through 2009.
Land Titles Office figures compiled by the research company RP Data show a typical Sydney house that sold for $554,800 in early 2009 fetched between $500,000 and $655,000 towards the year's end.
The $655,000 figure - a record - is the median price for November. RP Data warned that median monthly prices were volatile and said a better guide was to examine a range of median prices over a number of months.
Sydney's price rise of 12 per cent in the 11 months to November more than offset the slide of 5 per cent during 2008 after the global financial crisis. It was eclipsed only by Melbourne's rise of 17 per cent, Darwin's 15 per cent and Hobart's 14 per cent. Prices in Brisbane and Perth rose a more modest 6 per cent.
The price of a typical Sydney unit increased 11 per cent to $435,000.
Importantly, prices continued to rise in October and November despite back-to-back interest rate rises in those months and the decrease in the first-home owners' grant towards the end of the year.
''First-home buyers have been trending down since peaking in May,'' RP Data's research director, Tim Lawless, said. ''But the gap is being filled by upgraders and investors who are much less sensitive [to price].''
Other credit figures showed borrowing for housing up 0.7 per cent in November and 8 per cent over the year.
The CommSec chief economist, Craig James, said the resilience of the housing market increased the chance of another interest rate rise when the Reserve Bank board meets in February.
''The main worry is that home prices are rising at unsustainable rates in some capital cities such as Darwin, Hobart and Melbourne,'' he said. ''The last thing anyone wants … is another boom-bust scenario … The main uncertainty for the bank is the extent to which the housing market slows in the new year following the latest rate hikes and the expiry of the home-buyers' boost.''
Mr Lawless said he expected more modest house price growth in 2010. '' We would expect conditions to moderate … but the primary driver of growth will continue to be an undersupply of housing, coupled with extraordinary demand fuelled by population growth.''
The sharemarket closed at its highest level all year last night. The S&P/ASX 200 finished at 4870.6, after opening the year at 3722. The rally, starting in March, lifted the market 54.6 per cent, well short of its high of 6851.
BIG MOVERS
The median price rises:
Melbourne 17 per cent
Darwin 15 per cent
Hobart 14 per cent
Sydney 12 per cent
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