Domain.com.au House Price Report December Quarter 2015

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1 Domain.com.au House Price Report December Quarter 2015 Dr Andrew Wilson Senior Economist for Domain.com.au Key findings Record drop in Sydney median house prices over the December quarter Melbourne and Canberra record highest annual house price growth since 2009 Adelaide, Hobart and Brisbane record stronger house price growth House price falls in Perth steadying, while Darwin housing market remains weak For further information please contact:

2 Domain Group House Price Report The Sydney property boom of the past three years is clearly over, with the harbour city now reporting a sharp decline in house prices over the last quarter. All other Australian capital cities have reported moderate to strong house price growth, except Perth and Darwin which experienced weakening market activity according to the December quarter Domain.com.au House Price Report. Domain Senior Economist, Dr Andrew Wilson, said: The higher mortgage interest rates initiated mid-year by financial regulators for both investors and owner-occupiers have demolished the previous booming markets of Sydney and Melbourne, whilst house prices continued to fall in Perth and Darwin as a consequence of the slowdown in the mining sector. Other capital city markets, however, are now recording solid results, reflecting improving local economies and restored market confidence. Capital city house price growth rates are likely to converge through 2016 constrained by a generally stagnant, low growth, low yield economy. The growing uncertainty over the global economy may encourage the Reserve Bank to cut official interest rates, however this may be offset by further rises in bank mortgage rates." Home owners and those on the market can research the estimated values of 13 million properties in Australia (including those on and off the market) on Domain s Home Price Guide domain.com.au/property-profile/ Sydney Sydney median house prices fell by a dramatic 3.1 per cent over the December quarter the first fall since June 2012 and the sharpest quarterly decline in house prices reported by the city on record. Despite the record fall over the December quarter, Sydney house prices increased by 14.8 per cent over Sydney s median unit prices also fell steeply over the December quarter, dropping by 2.8 per cent to $655,845. It s the first quarterly fall since March 2013 and again, the sharpest decline on record. However across the year, Sydney unit prices increased by 8.7 per cent. "The remarkable Sydney boom we ve seen over the last three years is now clearly over, with the market unlikely to record any notable house prices growth until at least spring. While the median house price still remains above $1 million (at $1,013,258), if current trends continue it will likely fall below this benchmark by mid-year," said Domain Senior Economist, Dr Andrew Wilson. Melbourne The Melbourne median house price increased by 1.8 per cent over the December quarter, recording an annual growth of 14.5 per cent over 2015 the highest annual result recorded by the city since the 2009 boom. Melbourne unit prices increased by 1.3 per cent over the December quarter to $446,046 for an annual increase of 2.4 per cent. While a positive result overall, the annual percentage growth was considerably below the previous year s result of 5.2 per cent. "It s good news for Melbourne home owners, with the city recording its highest annual growth since While quarterly growth rates have weakened sharply, the end-ofyear results remained positive as local supply and demand drivers remain robust. Melbourne recorded a median house price of $719,486 over the quarter to remain the second highest priced capital city housing market, behind Sydney," said Domain Senior Economist, Dr Andrew Wilson. $1,013,258 Sydney 14.8% 8.7% $655,845 $719,486 Melbourne 14.5% 2.4% $446,046

3 Brisbane Brisbane house prices bounced back over the December quarter with the median house price increasing by 1.5 per cent to reach $511,361 up on the 0.7 per cent recorded over the previous quarter and the highest result for the year. Brisbane unit prices fell again over the December quarter down by 1.1 per cent to $359,965. Local unit prices were down by 5.3 per cent over 2015 the sharpest decline in annual prices since years ago. "It s a positive result for Brisbane house owners, with the median house price recording its highest quarterly growth for the year. "Unfortunately for unit owners, the record levels of new apartments continue to impact the Brisbane unit market, with supply clearly pushing ahead of demand. This has contributed to a fall in unit prices across the city," said Domain Senior Economist, Dr Andrew Wilson. Adelaide The Adelaide housing market reported another solid result over the December quarter with the median house price increasing by 1.8 per cent to $494,284. The Adelaide median house price increased by 6.7 per cent over 2015, its best annual result since Adelaide unit prices increased strongly by 3.0 per cent over the December quarter to $310,090. Unit prices rose by 5.2 per cent over the year - the highest annual growth rate since "It s a positive story for Adelaide home owners with the city recording five consecutive quarters of house price growth for the first time since the boom period of With growth continuing at it s current pace it is highly likely that the median house price will break through $500,000 by mid-year," said Domain Senior Economist, Dr Andrew Wilson. Perth Perth house prices have been declining for four consecutive quarters but there may be some relief in sight, with the decline recorded this quarter at a marginal 0.8 per cent, for a median price of $585,369. The Perth median house price is now the lowest recorded by the city since the March quarter 2013, with prices falling by 4.5 per cent over 2015 the sharpest annual decline since Perth unit prices rebounded over the December quarter rising by 1.5 per cent to a median of $388,834. Similar to house prices, Perth unit prices fell by 5.0 per cent over 2015 the sharpest annual decline since $511,361 Brisbane $359, % -5.3% Adelaide 6.7% 5.2% $494,284 $310,090 Perth $585,369 $388, % -5.0%

4 "Although Perth s median house price continues to fall as a result of the declining mining sector, it s not all bad news. There are early signs suggesting that the rate of decline is moderating, as affordability improves and confidence recovers," said Domain Senior Economist, Dr Andrew Wilson. Hobart Hobart house prices increased strongly over the December quarter up by 7.9 per cent to a median of $359,837 the highest quarterly growth rate for over a decade. The December surge in house prices has resulted in an increase of 8.7 per cent over 2015 the highest annual result for the local market since Although Hobart unit prices fell by 3.3 per cent over the December quarter, they increased by 7.1 per cent over 2015 to a median of $268,401. "The Hobart housing market delivered a strong result in the December quarter, especially given Hobart house prices have increased by just 5.8 per cent over the past 5 years. This indicates further potential for growth as the local economy improves and positive consumer sentiment builds," said Domain Senior Economist, Dr Andrew Wilson. Canberra Canberra s median house price increased by 4.3 per cent over the December quarter to $652,307 its highest quarterly growth rate since December It s a great result for the capital s housing market, which has seen a median house price increase of 9.0 per cent overall in The Canberra unit market also experienced positive growth recording a modest increase of 0.8 per cent over the December quarter to reach a median unit price of $405,110. Despite December s small rise, Canberra median unit prices fell by 2.2 per cent over "A really good story in Canberra this quarter, with the local market continuing to rise after a subdued period of buyer activity. Canberra s house price growth of 9.0 per cent over the year is behind only that of the Sydney and Melbourne markets and is the best local annual result since "The fall of unit prices across 2015 demonstrates the high levels of new apartment construction predictably moving supply ahead of demand in the Canberra market," said Domain Senior Economist, Dr Andrew Wilson. Hobart 8.7% 7.1% $359,837 $268,401 $652,307 Canberra $405, % -2.2%

5 Darwin Darwin house prices fell again over the December quarter, dropping by 2.0 per cent to reach $636,854. Despite recent sharp falls, the Darwin median house price has fallen by just 1.0 per cent over the past year, an improvement on the previous year s decline of 5.4 per cent. Darwin unit prices fell slightly over the December quarter down by 0.4 per cent to reach a median of $407,132. Unit prices decreased by 2.0 per cent over 2015 which was an improvement on the previous year s fall of 6.5 per cent. "While the local economy remains strong, the Darwin housing market continues to be impacted by the decline in the resource economy and the end to the significant demand driver of the fly-in-fly-out mining workforce. Darwin unit prices are now the lowest since June 2012, reflecting the oversupply from record levels of apartment construction," said Domain Senior Economist, Dr Andrew Wilson. $636,854 Darwin $407, % -2.0%

6 Median prices Domain House Price Report December 2015 Quarterly stratified median prices Houses Dec-15 Sep-15 Dec-14 QoQ % Δ YoY % Δ Sydney $1,013,258 $1,045,460 $882, % 14.8% Melbourne $719,486 $706,764 $628, % 14.5% Brisbane $511,361 $503,826 $491, % 4.0% Adelaide $494,284 $485,762 $463, % 6.7% Perth $585,369 $589,999 $612, % -4.5% Canberra $652,307 $625,269 $598, % 9.0% Hobart $359,837 $333,645 $330, % 8.7% Darwin $636,854 $649,708 $643, % -1.0% National $723,163 $726,496 $655, % 10.2% Quarterly stratified median prices Units Dec-15 Sep-15 Dec-14 QoQ % Δ YoY % Δ Sydney $655,845 $675,019 $603, % 8.7% Melbourne $446,046 $427,551 $435, % 2.4% Brisbane $359,965 $364,909 $379, % -5.3% Adelaide $310,090 $291,931 $294, % 5.2% Perth $388,834 $405,952 $409, % -5.0% Canberra $405,110 $401,926 $414, % -2.2% Hobart $268,401 $277,531 $250, % 7.1% Darwin $407,132 $408,674 $415, % -2.0% National $517,575 $524,656 $493, % 4.8% Houses Stratified Median Prices (Quarterly) Units Stratified Median Prices (Quarterly) $1.2mil $800k $1mil $700k $600k 800k $500k 600k $400k 400k $300k $200k 200k $100k 0 Sydney Melbourne Brisbane Adelaide Perth Canberra Hobart Darwin National $0k Sydney Melbourne Brisbane Adelaide Perth Canberra Hobart Darwin National December 2015 September 2015 December 2015 September 2015

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