The ABS, released the House Price Indexes today with the data showing prices up to new all-time highs in the June quarter, increasing by 2.4%.
In fact, were it not for upwards revisions to previous quarters, the gains would have been above 3%.
The main drivers of the growth in the quarter were Sydney, Perth and Darwin. However, prices once again went nowhere in Adelaide and Hobart.
June quarter
Source: ABS
Previous quarters were revised upwards leading to strong year-on-year gains.
The quarterly changes chart shows how Australia's market has picked up very strongly over the last year or so (a little longer in truth; there is something of a time lag in the ABS data).
Quarterly changes
Source: ABS
After these results, Australian house prices are now nationally the highest they have ever been.
Prices are way higher than previous peaks in Sydney (+4.6%), Perth (+4.8%) and Darwin (+12.3%), but this is offset to some extent by cities such as Adelaide and Hobart, where prices remain below where they were in 2010.
Year-on-year the strongest gains have been in Sydney, Darwin and Perth, but weakest in Adelaide where prices have not budged despite generational lows in interest rates.
With a further interest rate cut today, the housing market will likely continue on its upward path.
In particular, the Sydney market seems to have all the elements in place for a property market boom: properties are selling very quickly and there is little available stock on the market.
It's an awkward result for those advising homebuyers to stay out of the market for the last few years as the market looks set to continue increasing in the short-term.
You can fudge the numbers all you like by adjusting them for inflation or incomes, GDP or whatever, but the simple fact is that real estate is bought using nominal dollar amounts - and if you took the advice to stay out of the market you'll now likely be paying more for a house.
My position has always been that over the longer term, the most rational proxy for house price growth is simply the growth in household incomes.
Of course, the path going forward won't be smooth - there will always be peaks and troughs, and a correction might always happen - but the market has a funny way of making monkeys of those who try to be too clever by second-guessing it or sermonising about 'inevitable' negative outcomes.
Markets are far less predictable than people seem to believe (they've seemingly learned nothing and they still talk in absolutes despite having been wrong over and over again: "this will happen; that will eventuate...).
The result has caused anger among would-be homebuyers who have stayed out of the market for half a decade on the promise of a major correction.
Residents of cities such as Adelaide were merely sold something of a dummy, with prices broadly having gone nowhere, so all that has been lost has been five years or so of rent money. In cities such as Sydney, Melbourne and Perth, though, it was a full-on hospital pass, with prices moving up very strongly and renters being clobbered.
In direct contradiction to the predictions of an inevitable housing bust, I've unerringly forecast that the lagging supply in Sydney's inner ring suburbs will most likely see prices boom to record new highs. Despite all the smoke and mirrors, I've seen nothing to date which alters my view. The Sydney market is tight, supply is lagging and the population is booming by the year.
With interest rates now lower still and the banks cutting mortgage rates in a battle for business, it could yet end up being a complete stitch-up for those who predicted a market crash...a right bang-up job.
My position has always been that over the longer term, the most rational proxy for house price growth is simply the growth in household incomes.
Of course, the path going forward won't be smooth - there will always be peaks and troughs, and a correction might always happen - but the market has a funny way of making monkeys of those who try to be too clever by second-guessing it or sermonising about 'inevitable' negative outcomes.
Markets are far less predictable than people seem to believe (they've seemingly learned nothing and they still talk in absolutes despite having been wrong over and over again: "this will happen; that will eventuate...).
The result has caused anger among would-be homebuyers who have stayed out of the market for half a decade on the promise of a major correction.
Residents of cities such as Adelaide were merely sold something of a dummy, with prices broadly having gone nowhere, so all that has been lost has been five years or so of rent money. In cities such as Sydney, Melbourne and Perth, though, it was a full-on hospital pass, with prices moving up very strongly and renters being clobbered.
In direct contradiction to the predictions of an inevitable housing bust, I've unerringly forecast that the lagging supply in Sydney's inner ring suburbs will most likely see prices boom to record new highs. Despite all the smoke and mirrors, I've seen nothing to date which alters my view. The Sydney market is tight, supply is lagging and the population is booming by the year.
With interest rates now lower still and the banks cutting mortgage rates in a battle for business, it could yet end up being a complete stitch-up for those who predicted a market crash...a right bang-up job.
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