2009 Capital growth and median dwelling prices Australian capital cities

The latest report from the RP Data Rismark Hedonic Home Value Index

News Released Friday 29 January 2010


It is often forgotten that between December 2003 and December 2006 Sydney home values fell by over 6 per cent. 2009 finally saw Sydney home values recover with the December ??09 home value now 5.8 per cent higher than the previous Feb ’04 peak. Rental yields in Sydney are slightly higher than the national average with houses returning a gross yield of 4.2 per cent and units returning 5.1 per cent. The median price of a Sydney house over the December quarter was $600,000 and the median price of a Sydney unit was $430,000.


Similar to Sydney, between the end of 2003 and end of 2005 Melbourne home values only rose by 2.8 per cent. The Melbourne market recovered much sooner than Sydney’s and home values recorded a strong surge in 2007 (up 21 per cent compared to a 7 per cent gain in Sydney). 2009 was another big year for the Melbourne market with house values rising a further 14.9 per cent and unit values up 18.0 per cent. With such strong capital gains and a relatively flat rental market Melbourne rental yields suffered. Houses are now providing a gross rental return of 3.7 per cent (the lowest in the nation) and units are returning 4.3 per cent (the second lowest in the nation after Perth). The median price of a Melbourne house over the December quarter was $499,000 and the median price of a Melbourne unit was $410,750.

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The Brisbane market remained comparatively subdued during 2009 with values increasing by 7.3 per cent over the year. The comparatively weak performance can partly be attributed to the strong gains recorded in 2007 where Brisbane values gained 24.6 per cent over the year. Gross rental yields in Brisbane remain above the national average with houses returning 4.4 per cent and units returning 5.0 per cent. 2010 is likely to see Brisbane outperform the national average due to the fact it is in a later stage of the cycle, together with ongoing strong population growth and the benefit of several major infrastructure projects coming to fruition. The median house price in Brisbane is now $463,000 and the median unit price $383,600


Adelaide returned the weakest result of 2009 with home values increasing by a comparatively mild 6.2 per cent. Taking into account the strong growth of 2007 (home values were up 24.4 per cent) and the relatively stable market conditions of 2008 (Adelaide values actually gained 3.3 per cent in ??08) the South Australian capital has actually outperformed the national average over the three year period by about ten per cent. The city still provides some of the Australia’s most affordable metro housing with median prices at $380,000 for houses and $310,125 for units.


After the exceptional gains recorded in the Perth market during 2006, when annual growth peaked at 46 per cent half way through the year, the market underperformed the national average. Perth home values had been falling since September 2007 with a total decline of 7.9% at their nadir in December 2008. In 2009 residential property in Perth has staged a solid comeback with capital gains of 7.1% over the year to nearly recover their 2007 peak. Gross rental yields remain below the national average, despite the weak rate of capital growth. Rental yields on houses are 3.9 per cent and units are returning gross 4.2 per cent (the lowest of any capital city). The median house price in Perth is $490,000 and the median unit price is $400,000.


The standout performer over the last year has been Darwin with home values up 16.6 per cent over the calendar year. In 2008 Darwin values gained 11.2 per cent, in 2007 values were up 14.1 per cent and in 2005 and 2006 values increased more than 20 per cent in each year. Such a consistently strong performance has seen Darwin move from being one of the cheapest cities to buy a home to one of the most expensive. Darwin’s median house price has broken the $500,000 mark and is now at $510,000. The median unit price, despite the large gains, remains relatively affordable compared to other capital cities at $376,000 (only Adelaide and Hobart have recorded a lower median unit price).


The Canberra housing market has recorded the third strongest performance, with home values up 14.7 per cent over 2009. Unit values made the most significant jump, increasing by 23 per cent over the year ?? a performance second only to Darwin. Canberra median house prices are now the second highest in the nation after Sydney. The median house price is now $560,000, just $40,000 lower than Sydney. Median unit prices are the third highest of any capital city at $404,000.


Over the year to November 2009 Hobart values have gained 12.4 per cent, a result that has bettered the national average by just under two per cent. Rental yields are also above average with houses providing a gross return of 4.9 per cent (the second highest rental yield for houses after Darwin) and units returning 5.3 per cent. The Tasmanian capital remains the most affordable capital city by a long stretch with a median house price of $351,000 and a median unit price of $269,000.

Capital growth (hedonic index) and median dwelling prices
Australian capital cities, 2009 calendar year

  • Sydney values + 11.4% (median: $510,000)
  • Melbourne values + 15.6% (median: $460,000)
  • Brisbane values + 7.3% (median: $443,000)
  • Adelaide values + 6.2% (median: 365,000)
  • Perth values + 7.1% (median: $470,000)
  • Darwin values + 16.6% (median: $455,000)
  • Canberra values + 14.7% (median: $507,500)
  • Hobart values + 12.4% (median: $333,250)


PDF Full data document: http://www.rpdata.com/images/stories/content/pressreleases/rp_data_rismark_home_value_index_january_29_2010.pdf

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