Dwelling values across Australia's combined capital cities recorded a 1.9 per cent increase in June 2012 according to RP Data-Rismark's Home Value Index, taking the cumulative capital gain to 3.8 per cent over the 2012/13 financial year.
According to RP Data Research Director, Tim Lawless, the capital gains recorded over the financial year highlight that lower mortgage rates have started to have a positive impact on the housing market. He noted, however, that current conditions are far removed from the buoyant conditions of the 2009/10 financial year when home values rose by almost 14 per cent.
"At that time auction clearance rates were at a similar level to what they are now and mortgage rates were lower however, growth conditions were vastly different, Mr Lawless said.
The Index results showed that capital city dwelling values rose by 0.2 per cent of the June 2013 quarter, driven largely by a strong result in Australia's largest capital city, Sydney.
Melbourne and Brisbane recorded a slight fall in dwelling values over the quarter while the declines in Hobart, Darwin and Canberra were more significant.
Mr Lawless said that while there had been some natural volatility in the month-to-month readings of the RP Data-Rismark Index, the trend is much more indicative of an ongoing recovery in dwelling values.
"Looking deeper into the Index data reveals some interesting trends across the broad price based segments of the housing market.
"The Sydney premium housing market has gathered some pace since the beginning of the year, likely fuelled by stronger equity market conditions as well as the fact that premium priced housing markets showed a larger correction than other broad price segments. Sydney's most expensive suburbs have seen dwelling values rise by 4.8 per cent over the past six months compared with a 3.2 per cent rise in values at the most affordable end of the market and a 4.6 per cent gain across the broad middle priced segment of the Sydney market.
"In the other major capitals, the most affordable and broad-middle priced segments of the housing market are typically showing the best value growth. Premium markets are generally showing some appreciation, but still not at the same rate as lower priced market segments."
Mr Lawless went on to note that many other indices are also showing some movement – trends he put down to consumer uncertainty and the transition that is underway across Australia's economy.
"Consumer confidence also dipped over April and May before recording a rise in June, data on labour markets is jumpy and housing finance data shows hardly any improvement in the average loan size. If confidence levels remain high and labour markets continue to show a low rate of unemployment then we would expect that home values will continue to trend higher, albeit at a relatively measured pace," Mr Lawless concluded.
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