Heat goes out of house price hotspots

Prices in the Melbourne housing market could be joining previous hotspots Perth and Sydney in seeing a slowing in house price growth, a new study has found.

According to new data collected by Residex and reported by The Australian Financial Review, house prices in Melbourne fell in January to $473,500, while they grew by just 1.1% in Perth and 1.3% in Sydney.

By contrast, prices climbed by 6% in Brisbane, 5.6% in Adelaide, 4.7% in Canberra and 4% in Darwin.

A combination of previous big house price increases in Sydney, Melbourne and Perth and recent interest rates rises may have made housing unaffordable in some sectors of those markets, Residex chief executive John Edwards says.

According to Residex, while property prices at the top end of the market continue to rise rapidly, housing prices in the outer suburbs of those cities are performing very badly.