Australian house prices have made a notable increase in the past six months according to Knight Frank's Global Residential Cities Index for Q1 2017.
The Index tracked the performance of mainstream house prices across 150 cities worldwide and found a global increase of 6.9% on average in the year to March 2017 - figure only reached previously in the final quarter of 2013.
Knight Frank Head of Australian Residential Research Michelle Ciesielski said the first quarter of 2017 saw an uptick in Australian property prices, with active buyers in Sydney and Melbourne after a slower end to 2016.
"Hobart prices strengthened for the second quarter, stimulated by those priced out of these heated East Coast cities," she said.
“Four Australian cities have reappeared in the top 50 of our global index in Q1 2017. There were no Australian cities in the top 50 six months ago, when prices started to move towards a more sustainable level of growth.
“The index clearly represents the different pace of property growth around Australia with three in the bottom 50 and this was acknowledged by the Reserve Bank of Australia earlier this week when interest rates remained unchanged by the Board for the tenth consecutive month," Ms Ciesielski said.
Australia’s highest ranking city was Sydney in 23rd position with 14.4% annual growth in Q1 2017.
Although by the end of May 2017, Sydney annual median capital house values shifted back to 10.8%.
Melbourne followed in 24th position with 13.4% annual growth, although falling to 11.1% in May 2017.
“Given the annual volume of house sales across Australian capital cities was collectively down 1.3% and apartment sales were only up 2.6% over the year ending May 2017, it’s likely the positive capital growth experienced over recent years will not be as strong for the second half of 2017 and into 2018," Ms Ciesielski said.
“Many factors are influencing how the residential market performance is played out over the coming months.
"Many states have ramped up incentives to encourage more first home buyers into the market, lenders have increased mortgage rates for investor and interest-only loans, stamp duty concessions have been removed for off-the-plan purchases in Victoria and steep surcharges and fees have been imposed on foreign buyers, most recently announced in South Australia."The report also revealed that Chinese cities still dominate the top rankings, but first-tier cities such as Beijing and Shanghai shifted downwards.
Toronto (24.8%), home to a new foreign buyer tax, hinted at mirroring Vancouver (12.2%) in seeing its rate of growth moderate in coming months.
Of the 150 cities tracked, 123 (82%) recorded positive annual price growth and 40 of these recorded double-digit rises.
