Written by The Sidney Mornign Hereald Tuesday, 17 November 2009 20:29
A TYPICAL Sydney house now costs well in excess of $600,000 after surging at the rate of $5000 to $6000 a month all year.
The latest RP Data-Rismark property index shows prices in Sydney, Melbourne and Canberra continuing to climb apparently unaffected by a slowdown hitting other state capitals.
Sydney house prices are the most expensive but Melbourne's are climbing the fastest, gaining 12.6 per cent so far this year, compared to Sydney's 9.4 per cent.
At the trough in December the median Sydney price hit $554,800 before climbing through $600,000 in August and $606,800 in September.
The median Melbourne price climbed from $443,800 to $499,800.
But the RP Data index, Australia's most comprehensive, shows prices in other capitals turning down. The median Brisbane price slipped 1.3 per cent in September, the median Adelaide price 0.4 per cent and the median Perth price 2.5 per cent.
The national picture shows prices taking a breather in September as the First Home Owners boost winds down.''The key question is whether September is just a temporary pause or whether it represents a more general cooling,'' said Rismark's managing director, Christopher Joye.
''Only time will tell, but we are projecting materially lower rates of house price growth … as mortgage rates increase.''
The RP Data-Rismark index identified the recovery earlier than those prepared by real estate agents. It compares ''like sales'' with ''like sales'' and so is not distorted by changes in the composition of the stock sold.
''The booming growth that they are reporting now may relate more to past than present conditions,'' Mr Joye said. ''We see no evidence of prices accelerating.''
Reserve Bank figures released yesterday showed demand for credit remained weak. Total borrowing climbing just 1.7 per cent over the year to September, the slowest pace since 1993.
The bank board is expected to increase interest rates by a further 0.25 percentage points on Tuesday, pushing the standard variable mortgage rate above 6 per cent and adding $45 to the monthly cost of servicing a $300,000 loan.
A Reuters survey has economists pricing in the equivalent of four extra such rate increases before the middle of next year, taking the standard variable mortgage rate above 7 per cent.
Centrebet stopped taking bets on the Tuesday rate rise yesterday, saying almost all the money was waged on the favourite - an increase of 0.25 percentage points.
''There was virtually nothing placed on a hike of 0.50 points, and nothing placed on no change. Even when we adjusted the odds, the favourite was all the punters wanted to back,'' said a spokesman, Neil Evans.
Most punters who backed an increase of 25 basis points will earn $1.45 on every dollar invested.
''It'll go some way to easing the pain,'' Mr Evans said.
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