Sydney and Melbourne remained the best performers in September due to the increased participation of property investors, according to the latest report by CoreLogic.
The two cities both reported price gains of 1.7% on a month-on-month basis. For the three months September, Sydney and Melbourne also reported the most substantial value growth at 3.5% and 3.4%, respectively.
The two housing markets lifted the overall growth in dwelling values by 0.9% monthly and 1.7% quarterly.
The growth in these two cities can be attributed to the strong activity by property investors.
Figures from the Australian Bureau of Statistics show that investors accounted for 32% of the mortgages issued in New South Wales and 26% of home loans in Victoria.
Furthermore, he said the economic and demographic conditions in New South Wales and Victoria continue to outperform most areas of the country, helping Sydney and Melbourne achieve substantial house-price growth.
Population growth is higher, unemployment is lower, and jobs growth is stronger, providing a solid platform for housing demand.
Sydney and Melbourne helped the overall housing market achieve its third consecutive month of gains.
However, while housing values are consistently rising month after month, they are still below peak levels.
This indicates that buyers still have some time to take advantage of improved housing affordability before values return to record highs…
The table below shows the performance of each capital city:
The lowest interest-rate environment could further boost the price gains in high-demand areas such as Sydney and Melbourne.
Westpac economists are expecting house prices in the two cities to rise by 12% by 2020 while UBS market watchers are predicting a “mini-boom”, with prices increasing 5% to 10% in the next 12 months.
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