Sydney house and unit prices rebounded in the final quarter of 2012 to finish the year at record highs, according to full year figures from Australian Property Monitors (APM).Sydney house prices rose by 2% over the quarter to be up 3.4% for the year with the median price rising to a record $656,415, the first time the median price has been above $650,000 and are now $10,000 above their previous peaks.
Canterbury-Bankstown was the top performing region with the median house price increasing 11.5%, however prices did fall on the lower north shore by -0.4%.
Sydney unit prices gained 2.3% over the quarter to be up 5.6% for the year and also posted a record median price of $475,314.
The rises for the quarter were based on upwardly revised September quarter figures.
APM revised the Sydney’s median house price for the September quarter from $641,890 to $643,578, while the median unit price was revised from $458,562 to $464,572.
Australian Property Monitors senior economist Dr Andrew Wilson says Sydney again “illustrated the resilience of its housing market”.Wilson says the Sydney market revival is being driven from the middle upwards rather than from the top down with changes to first-home buyer grants in 2012 bringing forward demand while change-up buyers also become active.
“We are seeing a lot of activity in the middle price section of the Sydney market between $500,000 and $900,000, and that’s what is pushing up those median house prices to record levels," he said in an interview on AFR TV.
Wilsons says the prestige market in Sydney, which has to date been the ‘weak link” in the market, may also start to grow in 2013.
Nationally, house prices rose by 1.9% over the quarter to finish the year in positive territory – up 2.1% to a median of $542,299.
Unit prices increased by 1.6% over the quarter to be up 2.4% for the year with a median price of $417,123.
September quarter figures were also revised.
The median house price was revised downward from $533,480 to $532,274, while unit prices were upwardly revised from $406,415 to $410,508.
All capital cities recording house price gains over the quarter – the first time this has happened since March 2010.“I think it is no coincidence that we have historically low interest rates and we are just starting to see a consistent rise in confidence in housing markets," says Wilson.
But he tempered this by saying capital cities and sub-markets are still performing at different levels.
“We are still seeing the fractured type of outcome."Sydney is the only capital city market where house prices are above their previous peaks, but APM expects that based on current trends, Perth, Canberra and Darwin will achieve record house prices in 2013.
Wilson says the property market rebounded “as expected in 2012” on the back of the “general improvement in affordability and confidence” due to record low interest rates fuelling increasing buyer activity.Excluding the volatile Darwin market, Perth was the top-performing capital city market over the year, with house prices up 6% over the quarter and unit prices up 6.1% to medians of $560,780 and $365,132 respectively.
Perth’s September median house price was upwardly revised from $537,237 to $547,160, and its median unit price upwardly revised from $348,293 to $352,961.
Wilson says the Perth price rises are being driven by around 1,500 people arriving each week in Perth and by a tightening rental market and rising rents, pushing more people into the house-buying market.
Melbourne house prices gained 2.5% over the quarter to end the year just in positive territory – up 0.5% to a median of $526,281 with units up 1% for the quarter but still down for the year at -2.2% and a median of $390,651.
Brisbane house prices increased by just 0.3% to be down 0.5% for the year (median of $433,302) but Wilson said this small quarterly gain was significant “as it signalled a revival in activity after a lengthy period of price falls”.
Of some concern to investors would be the Brisbane unit market – the epicentre of dozens of new apartment projects – where prices fell 2.7% over the quarter to be down 3.2% for the year, making it the worst performing house or unit market for the year.
Adelaide continues to remain the most affordable mainland capitals with as median house price of $432,309.
“Looking ahead in 2013 activity will depend on the direction of local economies as it is no coincidence that the better performing housing markets in 2012 reflected better performing economies - particularly in regard to unemployment levels,” says Wilson.
“With a rising share market and an improving international outlook, the general economic landscape and prospects remain optimistic which is unequivocal good news for Australia’s recovering housing markets,” he says.