September is heralding a bright spring ahead, with positive indicators that buyers are returning to the market. According to the latest Bendigo Bank/REIA Real Estate Market Facts publication, the weighted average median price* for all capital cities has increased by 1.4% for houses and by 0.6% for other dwellings over the June quarter, rising to $519,768.
How are the capital cities faring?
Compared to the March quarter, the largest increase in the median house price was in Hobart where we have seen an increase of 4.8% to $370,000. The median house price in Canberra fell by 5.0% and Perth remains the same.
Other states recording increases were both Adelaide and Melbourne. Adelaide’s median house price increased by 3.4% over the June quarter to $395,000, while the median house price in Melbourne increased by 2.9% over the quarter to $535,000.
Year on year the data paints a different story, with Darwin being the only capital city to record an increase in the median house price, rising 10.7% to $570,000.
Capital City Median House Prices
The market as still relatively stagnant and my optimism is muted because the reality is that compared to the June quarter of last year, the weighted average price has actually decreased by 3.1%.
Good news for investors
The news is good for investors with improving yields, thanks to tight vacancy factors and the impact on rental returns coupled with lower borrowing costs. Every capital city with the exception of Adelaide, Hobart and Canberra experienced strong demand for rental accommodation during the June quarter, however despite this, national vacancy rates remain low.
Over the June quarter, the greatest increases in the median weekly rent for three bedroom houses was recorded in Perth, with increases of 3.5% over the quarter, and 12.8% over the year. Likewise, Perth also recorded the greatest increase for 2 bedroom other dwellings, with the median weekly rent rising 5.1% over the quarter, and 10.8% over the year.
Capital City Median Rents
While economists keep a close eye overseas markets and in particular the Euro crisis, in Australia, a turning point seems to have been reached and the overall mood for the housing sector is one of quiet confidence.
*The Bendigo Bank/REIA Real Estate Market Facts derives the weighted average median prices from the quarterly median prices for all capital cities weighted according to the number of houses and other dwellings for each corresponding city. These numbers are sourced from the ABS 2011 Census.