Two-speed housing market emerges as prices nationally slow

Property prices in two cities have broken away to hit new highs as the national rate of increases slows.

A two-speed property market looks set to emerge as prices in two cities break away to hit new highs. Pictures by Julian Andrews.

Brisbane and Adelaide have smashed decades-long price records as a two-speed property market begins to emerge.

The increase in prices continued to slow in most markets through November, up 1.3 per cent nationally, according to property researcher CoreLogic. Sydney (up 0.9 per cent) recorded its weakest result since the start of the year and Melbourne was up 0.6 per cent.

 

But Brisbane (up 2.9 per cent) and Adelaide (up 2.5 per cent) have defined the trends.

Each set records, with Brisbane achieving its strongest month since October 2003 and Adelaide breaking the February 1993 record.

CoreLogic research director Tim Lawless said the fact some cities were still recording highs in the current boom cycle was surprising given the longevity of gains. “We’re starting to see a fairly broad based slowdown across the market, caused by a lot of the indicators pushing prices higher are losing their potency,” Mr Lawless said.

“Adelaide and Brisbane have been quite immune to that and I think we can put that down to the fact … they have these really strong demographic tailwinds behind them.”

Elsewhere, the slowdown trend continued. Canberra and Hobart each rose 1.1 per cent, while Perth prices increased 0.2 per cent. Darwin recorded the only decline, down 0.4 per cent. Regional markets continued to outperform the capitals, up 2.2 per cent in November.

Over the year, national ­housing prices have rose 22.2 per cent as the country moved through the fastest boom on ­record, adding approximately $126,700 to the median value of a home.

AMP chief economist Shane Oliver expects growth next year to slow to just 5 per cent, citing affordability, the rising number of advertised properties, credit tightening by the banks and spending to move away from housing.

Capital city houses are now 37.9 per cent more expensive than capital city units – the largest difference on record. NAB executive of home ownership Andy Kerr expects the relative affordability of higher density will draw younger buyers back to the inner city. “The lure of being close to the CBD and all the lifestyle the CBD offers, and the value in an apartment, we are seeing the balance is starting to tip back,” he said.

In the past four weeks, total listing levels were more than 30 per cent lower than the five year average in Adelaide and Brisbane.