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Jessica Darnbrough
New research shows the days of double digit house price growth are now all but over.
According to RP Data’s latest Weekly Property Pulse, capital city home values have increased at an average annual rate of just 1.9 per cent over the past five years.
Darwin triumphed as the city to record the strongest growth in home values over the past five years while Hobart, Brisbane and Perth each recorded value falls on an annual average basis.
Overall, Darwin values increased at an average annual rate of 4.1 per cent over the period, while values fell at a rate of 1.9 per cent, 0.8 per cent and 0.4 per cent in Hobart, Brisbane and Perth respectively.
From December 2002 to December 2007, the overall performance of the housing market was comparatively stronger, where over the five-year period, capital city home values increased at an average annual rate of 8.4 per cent, almost 4.5 times greater than growth throughout the most recent five years.
Excluding Sydney, between 2002 and 2007, each capital city housing market recorded superior levels of average annual value growth compared to the overall performance over the most recent five years.
According to RP Data’s senior research analyst Cameron Kusher, during this period every city other than Sydney recorded average annual value growth which was more than 2.5 times greater than the most recent five-year period.
“Sydney’s housing market performance has actually been stronger over the most recent five years than it was between 2002 and 2007,” he said.
For the period 2002 to 2007, the standout housing markets were Perth, which recorded 19.4 per cent growth, and Hobart, which recorded 17.2 per cent growth.
“The global financial crisis, and the subsequent changes in consumer attitudes that it has led to, has largely impacted the results of the most recent five years,” Mr Kusher said.
“However, it remains difficult to argue that value growth would have been as strong over the past five years as the previous five years, even without the financial crisis.
“As the cost of buying and selling continues to increase, albeit at a much slower pace, it seems unlikely that capital gains in the housing market will return to those levels enjoyed between 1997 and 2002 and will be more reflective of conditions over the most recent five years.”
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