Property prices in the capital cities have continued 2013’s impressive gains with a 1.2 per cent increase for the first month of 2014.
According to the monthly RP Data-Rismark Home Value Index, Melbourne was January’s star performer with a monthly increase of 3.2 per cent, while Sydney remained on top, year on year, with 13.4 per cent growth.
Tim Lawless, RP Data’s research director, said the data showed that our two biggest cities remained the best performing capitals over the past 12 months. However, the news for the other capitals was more sobering.
“Excluding Perth, every other capital has recorded growth of less than five per cent over the past year,” he said, before adding that Melbourne had enjoyed 11.9 per cent growth year on year to Sydney’s 13.4 per cent.
Mr Lawless said he believed the results would mean the Reserve Bank of Australia would most likely leave rates where they were when a decision was made this afternoon, while he told Real Estate Business' sister title, The Adviser, that he saw a small rate increase in the short to medium term.
“Together with the higher than expected inflation reading and a lower Aussie dollar, the sustained growth in dwelling values is another factor the RBA is likely to consider when deliberating on any movement in the cash rate,” he said.
January’s RP Data statistics were further evidence that both Sydney and Melbourne are well advanced in their respective growth cycles, and Mr Lawless believed there would be a further cooling of prices in 2014 as lower rental yields, an increase in supply of properties and increasing affordability constraints made an impact.