"The RBA chose to highlight this striking development in its December minutes. The board noted that “housing prices had increased at an annualised rate of 15 per cent over the past six months”.
Several sub-currents underlie Australia’s budding property tsunami. One question is how prices compare with their previous all-time peaks. The last boom ended in late 2010 when the national median dwelling price – across all regions and property types – touched $425,000. Today it is 10 per cent dearer at $468,000, according to RP Data.
Capital city strength
This story is accentuated in the capitals.If one strips out the cheaper non-metro regions, the national median across houses and apartments is $540,000, which is 13 per cent above its 2010 high.
In Sydney and Melbourne, dwelling prices maxed out at $538,000 and $491,000 respectively, in 2010. In December 2013, the Sydney median hit a record $655,250, while the typical Melbourne home is $563,000.
Another revelation is that the recovery has been faster in more expensive markets. In 2009 and 2010 first-time buyers led the charge and luxury suburbs lagged. But when RP Data divides its index into cheap homes, mid-priced properties and the most expensive dwellings, it finds the luxury market is now outperforming.
In the final six months of 2013, the dearest 20 per cent of homes ranked by price realised capital gains of 6.7 per cent. In contrast, the cheapest 20 per cent of properties registered a 5.5 per cent increase. This dynamic gels with the comparatively subdued first-time buyer participation evidenced in the home loan data."
