Australian home values have delivered double digit growth in 2009, according to figures from RP Data.
House prices rose by 1.1 per cent in November 2009, for a cumulative growth of 11.3 per cent in the first 11 months of last year.
Extraordinary house prices in Sydney and Melbourne led to the unprecedented recovery.
Over the year, Melbourne was Australia’s best performing capital city outside of Darwin, generating capital gains of 17.0 per cent.
In Sydney, home values increased by more than 1 per cent per month with cumulative growth sitting at 11.6 per cent.
Rismark International managing director Christopher Joye said the housing market had surprised many forecasters who were predicting substantial property price falls throughout 2009.
“The inability of most analysts to get close to divining Australia’s housing market trajectory during the GFC and in the recovery since, combined with the many misconceptions one typically hears about housing, illustrates just how poorly understood the sector is,” Mr Joye said.
According to Mr Joye, first home buyers contributed to the strong results in the first half of 2009, while upgraders and investors accounted for the strong activity in the latter half of the year.
“First home buyers have been trending down since peaking in May 09 and the gap is being filled by upgraders and investors who are much less sensitive to rate rises and the level of stimulus. We expect this trend to continue in 2010.”
However, most analysts are predicting that house price growth will taper back to more modest single digit levels in 2010.
RP Data’s research director Tim Lawless said value growth in Australia’s residential sector is likely to be more subdued this year.
“Looking forward we could expect market conditions to moderate into 2010 as interest rates continue to move back to a neutral setting and the remainder of the government stimulus is rolled back. The primary driver of growth will continue to be an under supply of housing coupled with extraordinary housing demand fuelled by population growth,” Mr Lawless said.