House prices increase 1.7% in September

Housing prices have grown by 1.7% across the country during September in a fifth consecutive monthly gain, according to new figures released from property research firm Residex.

The increase also pushes the quarterly growth rate to 4.2%, the fastest rate since December 2007, while over the past six months prices have now risen at an annual pace of 14.3%.

In the capital cities, prices rose in Melbourne by 2.9%, with Sydney following at 1.9% for September and 5.7% growth for the last quarter. In Adelaide, prices grew by 1.2% and 2.2% for the quarter.

Prices dropped in Brisbane by 0.6% in September, with flat growth over the past three months, while Perth prices managed to rise during September but are still down by 4.5% for the year.

Additionally, houses are now catching up to units in terms of growth, with 1.2% growth in September and 2.7% over the past there months.

Westpac senior economist Matthew Hassan said in a statement that while the growth is strong, the demand in the housing market is expected to fall as the first home buyer’s give way to investors.

“With first home buyer demand softening as the Government’s bonus scheme phases down between October and December, and investor interest in property still somewhat mixed, further moderation in unit price growth looks likely to be short-term.”

“As well as the wind-down in first home buyer demand, recent and expected interest rate rises will also act to cool housing markets somewhat in the months ahead. That said, even with the recent price recovery, housing affordability is unlikely to become stretched any time soon.”