While there was a substantial fall in the weighted average median prices, over the year, the house price increased by 8.3% and the other dwelling price increased by 8.2%, reflecting the strong increases in prices recorded in some cities during 2007.
Only two capital cities, Sydney and Perth, now have a median house price above $450,000, as opposed to four capital cities in the December quarter. While Sydney has the highest median house price, Melbourne has the highest median price for other dwellings (flats, units and townhouses), as it did also in the December quarter. Hobart remains the cheapest capital city in which to buy property.
Brisbane, Adelaide and Hobart were the only cities to record a slight improvement in vacancy rates during the March quarter. The continuing shortage of rental properties has resulted in rent rises in the March quarter in all capital cities for both three bedroom houses and two bedroom other dwellings. Darwin has the tightest rental market with a vacancy rate of only 0.5%.
The most significant increases in rent for houses over the quarter were recorded in Darwin (8.9%), Brisbane (6.7%), and Hobart (5.4%). For other dwellings, the most significant increases were recorded in Hobart (6.5%), and Melbourne (5.4%). Median house rents in Darwin recorded a massive 44.1% increase over the year, while rents for other dwellings increased by 33.9%. Darwin is the most expensive rental location in the country while the cheapest rental location is Adelaide.
‘The fall in median prices is not surprising, following recent interest rate rises by the Reserve Bank to help curb inflation, accompanied by the additional increases introduced by many lenders,’ says REIA President Noel Dyett.
‘However, the fall in prices is being offset by the increased cost of financing home loans, so we have yet to see any real impact on housing affordability,’ Mr Dyett says.