Property market slows to Sept

The first official evidence of Australia's residential property market slowing has emerged with figures for the September quarter showing that median prices for Melbourne inner-city units fell 3.3 per cent and Sydney's median house price only rose 0.5 per cent over the three months.

Sydney's median house price rose to $409,500, only slightly up from $407,500 in the June quarter. Median unit prices rose to $330,000, a 1.5 per cent increase. Melbourne's median house price rose to $360,000 in the quarter, an increase of 2.9 per cent, but median unit prices fell 1.5 per cent.

Brisbane's median house price rose 2.7 per cent and unit prices rose 1.9 per cent, while in Adelaide house prices increased by 5.7 per cent and units by 8 per cent. In Perth, the median house price stayed at $190,000 in the quarter but unit prices rose 6.4 per cent.

Meanwhile, the governor of the Reserve Bank said last night that rising house prices earlier this year only became of concern to the RBA when they exhibited “bubble-like” behaviour. Given Australia's low inflation and interest rates, rising prices were not surprising, Mr Macfarlane said, but the issue was determining how much of this was just the logical outcome of economic adjustment and how much was “overshooting”. But the signs are the dangerous housing bubble has been averted, he said.

Mr Macfarlane also berated developers for their tactics in fuelling unrealistic investor expectations of market gains. Developers wooed investors into what was already an oversupplied market, he said, with marketing programs emphasising large future capital gains.

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