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House prices in Sydney are the highest in Australia


The latest figures show Sydney has had the strongest quarterly growth in house values in six years. 

Residential property values in the metropolis increased by 3 per cent in March and this averages to 5.8 per cent for the quarter. The combined increase in value across the capital cities rose by 1.4 per cent in March.

The first part of 2015 saw an impressive growth in residential property values according to numbers released by research company CoreLogic RP Data. Nonetheless, there has been a downtrend compared to the steady progress recorded in 2014.

Head of research Tim Lawless said the year has had a solid start to property development, but the annual rate of growth has been the slowest since September 2013 sitting at 7.4 per cent.

"With stronger housing market conditions over the first three months of the year, annual home value growth across the Sydney market has rebounded after slowing to 12.4 per cent in December 2014," he added. 

The data shows that Sydney is the only market where growth is in double digits. Melbourne, which is second in place for growth in house values, shows a yearly gain in worth of just 5.6 per cent.

The report shows values decreased slightly in in Perth, Darwin and Hobart, while Brisbane, Adelaide and Canberra remained stagnant.

A statement released by CoreLogic RP does point to the concern that this growth in Sydney may not be sustainable over the long term. 

This is because the city's household income growth is minimal while values have constantly risen over the past 35 months. 

"When the Sydney housing market starts to lose momentum, there is some risk that recent investors could be left holding a very expensive but low yielding asset with a lower than expected rate of capital gain over the coming years," Mr Lawless said.

Date Published: 05 May 2015
Category: General News

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