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The pace of dwelling growth across Australia’s capital cities has slowed notably during the year to July 2016, according to the HIA.
The August edition of the Housing Industry Association’s economics note Dwelling Prices: What’s the current state of play? found that the rate of dwelling price growth across Australia’s capital cities has eased back from 10.1 per cent in October 2015 to 6.1 per cent during July 2016.
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The research note also indicated that the variation in dwelling price growth trends is quite significant when comparing capital cities.
Sydney saw the largest increase in house prices over the year (+9.0 per cent) followed by Melbourne (+8.0 per cent).
In Hobart, house prices increased by 5.6 per cent, in Adelaide by 5.0 per cent, in Brisbane by 4.1 per cent and in Canberra by 3.1 per cent.
Meanwhile, house prices fell in both Perth and Darwin by 5.6 per cent and 5.9 per cent respectively.
According to the report, the ratio of dwelling prices to average earnings has increased significantly across Australia, driven by the large reduction in mortgage interest rates as well as an increase in the number of earners per household.
The report found that the price to earnings ratio is highest in Sydney and Melbourne and much lower in Hobart and Perth, indicating that future price growth is likely to be more limited in the largest capital cities.
Further, the survey found that most markets are in a favourable position in terms of affordability, with the mortgage repayment burden lighter than its 15-year average in all capitals apart from Sydney.
[Related: Big variances in affordability for Aussie home buyers
