Unprecedented demand from first home buyers and upgraders has helped 2009 post the strongest annual house price growth since 2003.
According to Australian Property Monitors’ (APM) Quarterly Housing report, the property market posted a 12.1 per cent rise in median house prices for the year to December 2009.
Melbourne was the strongest housing market in the country, recording an annual growth rate of 18.5 per cent, forcing house prices past the $500,000 barrier for the first time.
Sydney’s market, the biggest in the country, also performed well as house prices rose by exactly the national average of 12.1 per cent, following the third consecutive quarter of growth.
Although first home buyer demand sustained the market in the early part of the year, it was upgraders and investors that drove the strong overall result, as activity in the more expensive suburbs benefited from the surprisingly resilient jobs market experienced in late 2009 and a strongly rising share market.
“The price growth seen in the more expensive suburbs in 2009 has largely been a recovery of the price falls that have occurred since late 2007 and early 2008. This top-end recovery has been completed in most capitals with median house prices surpassing pre-GFC highs for the first time in the December quarter in Sydney, Brisbane, Adelaide and Perth,” APM economist Matthew Bell said.
“Rising interest rates and the full expiry of the First Home Owner Boost at the end of December are likely to continue to slow activity for first home buyers, while the recovery of top end prices to pre-GFC levels means that median price growth is likely to moderate across all sectors of the market in the first half of 2010, with the medium-to-long-term outlook for property prices remaining strong.”
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