Wheels come off in Adelaide as house prices surge

RP Data released its full report on the housing market for July recording gains almost everywhere with the notable exception of Adelaide, which recorded another sharp drop.

Gains were strong in Sydney (+2.0%), Melbourne (+2.3%), Perth (+1.6%), Darwin (+2.0%) and Canberra (+2.5%).

However, Adelaide seems to have lost its way recording losses for the month (-1.5%) and significant losses for the quarter (-3.1%).

Regular readers will know that I've long expected Sydney and Perth to be the strong markets and Adelaide and Hobart to be the weakest. 

Melbourne, I have to openly admit, has surprised me with its remarkable resilience.

RP Data's Cameron Kusher quoted at SMH:

"Australian house prices have posted their second consecutive month of solid growth, cementing perceptions that the Sydney, Melbourne and Perth property sectors are entering a broad recovery.

Capital city dwelling values rose 1.6 per cent in July, which comes on the back of a 1.9 per cent gain in June, according to new figures from RP Data-Rismark.

"But there's quite a divergence in results between the cities. You're seeing particular strength in markets like Sydney, Melbourne and Perth," RP Data analyst Cameron Kusher said.

Melbourne dwelling values rose 2.3 per cent in July. In Sydney, they rose 2 per cent. Perth saw an increase of 1.6 per cent.

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"On the other hand, markets like Brisbane and Adelaide are not really responding, which is surprising because the gap in pricing between those two markets and Sydney, Melbourne and Perth has really widened," Mr Kusher said.

Brisbane dwelling values showed virtually no growth at 0.1 per cent. A fall of 1.5 per cent was recorded in Adelaide.

Despite the divergence between the capital cities, national dwelling values have now risen 6.5 per cent since the market hit bottom in May 2012.

"I wouldn't say it's particularly strong compared to other recoveries but the trend is the important thing. You can see there's definitely a pick-up and the market is responding to the lower mortgage rates that are available," Mr Kusher said.

Values in Sydney, Perth and Canberra are now back above their previous peaks, RP Data-Rismark reports."