House prices made the biggest jump in a decade, according to Corelogic's results for the last quarter.
The best performing capital city was Sydney with 6.2 per cent growth, followed closely by Melbourne at 6.1 per cent, Hobart had a 3.4 per cent jump, Brisbane 2.4 per cent, Canberra 2.3 per cent, while Adelaide experienced a 1.4 per cent uptick.
The quarterly growth in national house prices marked the fastest gain since November 2009.
However, there were decreases in Perth at 0.1 per cent and Darwin 1.4 per cent over the quarter which was reflected in a bigger drop for these areas over 2019.
Corelogic head of research Tim Lawless said the big jump in some areas was caused by a drop in home values in the first half of the year and a seven per cent rebound over the second half of the year.
“The housing value rebound was spurred on by lower mortgage rates, a relaxation in borrower serviceability assessments, improved housing affordability and renewed certainty around property taxation policies post the federal election,” Lawless said.
“Lower advertised stock levels persisted providing additional upwards pressure on prices amidst rising buyer activity.”
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Despite the quarterly results, property values across most regions of Australia were still below their previous record highs with the exception of Hobart, Canberra and Tasmania which were already tracking at record highs.
If this rate continues the national housing market should record a nominal recovery in March as dwelling values push higher to new record highs.
The strong finish to 2019 is expected to be the start of larger gains in prices with anticipated listings, sales and RBA cuts to strengthen the market in coming months.
Capital Economics economist Marcel Thieliant said sales volumes were much stronger in recent months than the preliminary data suggested.
“Our sales-to-new listings ratio now points to house prices rising by around 10 per cent per annum. The auction clearance rate, which has hovered around 70 per cent in recent weeks, tells a similar story,” he said.
Thieliant added if the RBA cut rates again, as they anticipated, house price growth should slow from 8 per cent this year to 5 per cent next year as housing affordability would be the lowest since the GFC by mid-2021.