01/02/2013 - 13:50

More research points to rising demand for Perth property

01/02/2013 - 13:50

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More research points to rising demand for Perth property

The Western Australian housing market has been confirmed as one of the hottest in the nation, with median home values in Perth rising 1.7 per cent in January, according to new research released today.

RP Data-Rismark became the latest property sector analyst to highlight the rapid growth in Perth home values, reporting a 3 per cent rise over the three months to the end of January.

Dwelling values rose 1.2 per cent, on aggregate, across the country's eight capital cities, according to the monthly Home Value Index released this morning.

It follows the 1.2 per cent combined drop in values recorded over the final quarter of 2012.

The bigger population centres of Brisbane, Sydney and Perth were the key drivers, reporting price rises of 2.0 per cent, 1.8 per cent and 1.7 per cent, respectively.

Hobart, which has a smaller market, was Australia's best performing capital, with values jumping 4.5 per cent in the first month of the year and 5.3 per cent in the last quarter of 2012.

Canberra prices rose 1.5 per cent in January.

Conditions in Melbourne and Adelaide remained relatively flat, with values rising just 0.2 per cent and 0.4 per cent, respectively.

Darwin was the only city to report a fall in January, with prices down 2.2 per cent.

RP Data's research director Tim Lawless said housing market conditions had started the year on a strong footing.

"These strong January results are likely to have seen some upwards seasonal bias. However, the housing market has been on a clear recovery trend since June last year," he said in a statement.

While he said he didn't expect capital gains to remain this high over the coming months, it was likely the recovery would continue through 2013.

Mr Lawless said the latest data suggested the Reserve Bank of Australia (RBA) might be reluctant to cut the cash rate further.

"The Reserve Bank will be watching the performance of the housing market closely, and the positive trend in housing values will dampen calls for further interest rate cuts," he said.

The RBA cut the cash rate 1.75 percentage points between November 2011 and December 2012.

Dwelling values across the combined capital cities remain 4.6 per cent below their 2010 peak.

However, since the market bottomed out in May last year, prices have recovered 3.1 per cent.

The RP Data figures follow Australian Property Monitors evaluation of the market released yesterday, which showed Perth’s median house price jumped by 6.5 per cent over 2012 to $560,780.

APM said Perth’s median house price jumped by 2.5 per cent in the December quarter.

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