Australia's residential property price index rose 4.1 percent quarter-on quarter in the three months to December, after increasing 1.5 percent in the three months to September. This is the strongest quarterly growth since the three months to June 2015 but gains were not evenly distributed. Year-on-year growth in the index accelerated from 3.5 percent to 7.7 percent.
The headline index is a weighted average of house prices for the capital cities of Australia's eight states and territories. Of these eight cities, the strongest increase in house prices was seen in the two largest, Sydney, up 5.2 percent on the quarter and 10.3 percent on the year, and Melbourne, up 5.3 percent on the quarter and 10.8 percent on the year. Prices were weaker in Perth and Darwin, two cities with larger exposure to the mining sector, up 0.3 percent and down 1.5 percent respectively on the quarter, and falling by 4.1 percent and 7.0 percent respectively on the year.
The average (mean) price of dwellings in Australia was estimated to have risen by A$25,400 to A$656,800 over the three months to December.
Today's data are broadly consistent with the assessment of the housing market published today in the minutes to the Reserve Bank of Australia' s policy meeting held earlier this month. Officials noted then that "n some markets, conditions had been strong and prices were rising briskly, although in other markets prices were declining." Officials also expressed concerns about risks associated with the housing market at this meeting, noting that high levels of borrowing for housing had pushed growth in household debt above growth in household incomes. They also noted that extra supply of apartments were due to come "on stream" in eastern cities such as Sydney and Melbourne raising concerns that this could put downward pressure on prices and lead to financial stress for some borrowers.