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What is driving up property prices?

Residential property prices rose 2.4 per cent in the September quarter 2019, the strongest quarterly growth since the December quarter 2016, according to figures released on Tuesday by the Australian Bureau of Statistics (ABS).

Sydney and Melbourne residential property prices recorded strong growth in the September quarter.

Property prices rose in Sydney (+3.6 per cent), Melbourne (+3.6 per cent), Brisbane (+0.7 per cent) and Hobart (+1.3 per cent).

House prices rose 4.0 per cent in Sydney and 3.7 per cent in Melbourne while attached dwelling prices rose 2.8 per cent in Sydney and 3.6 per cent in Melbourne.

ABS chief economist Bruce Hockman said, "The increase in property prices is in line with housing market indicators, particularly in Sydney and Melbourne. New lending commitments to households, auction clearance rates and sales transactions all improved during the September quarter."

Residential property prices fell 3.7 per cent in the year to the September quarter 2019, with all capital cities except Hobart recording falls. This is a noticeable improvement on the 7.4 per cent annual fall in the June quarter 2019.

The total value of Australia’s 10.4 million residential dwellings rose by $189.9 billion to $6,869.4 billion in the September quarter. The mean price of residential dwellings in Australia is now $660,800.

Do you think property values will continue to rise in 2020?

7 comments

They are hitting an asymptote already because wages are being held down as the cost of living keeps going up.  That means there is less and less ability to buy a house and those who have the assets to buy are becoming less and less.  Prices cannot keep going up.  That's just real estate industry BS and no amount of talking it up can replace the lack of income to bring it about.

 

 

In real terms prices haven't gone up, it's just that our A$ has gone down. Against most Asian currencies it dropped around 10% last year. The media only focus on the US$ vs A$, where the drop of our currency has been less severe.

 

 

Hard to say where property prices will go from here. The lowering of interest rates caused increased demand. For overseas investors the resulting drop in the A$ value means property here looks cheap now, adding to the domestic demand. Also increased migrant intake adds to the pressure on prices. Sad to say that our economy is dependent on property construction and growth by increasing the population. Bad for the environment, bad for the quality of life. 

Too True

Maybe the Chinese are back! Wonder who will tell us the truth about where the demand is coming from?

Property prices are dictated under the rule of supply and demand. The top or bottom of a cycle is only known when it happens and predicting the ends of a cycle is almost impossible. Property prices will fluctuate but in the main prices will rise over any given period in large urban areas. House prices are outstripping the CPI which is the benchmark for wage increases and this gives rise to FOMO and an urgent need to buy now which also keeps prices artificially high.

Time to stop reporting in % and share actual NUMBERS. That 2.4% could mean anything, but compare the volume of properies from 2017 to 2019 and it could look more like 0.0024%. FOMO, and mainstream media are not helping push people into more debt just to make the government look good. GFC Ver. 2.0 coming

FOMO is what is driving up property prices. It signals the last desperate stage of a bull market. I expect to see property prices fall atleast 50% when their is no one left that fears missing out. 

Well the fires/smoke around the city of Sydney has been seen internationally and I doubt it has done much to increase the value of properties in the city. But then again Sydney is not my choice of a place to live.  

I would be interested to see the values in the next quarter after the bush fires have stopped puffing out their smoke.

Well the fires/smoke around the city of Sydney has been seen internationally and I doubt it has done much to increase the value of properties in the city. But then again Sydney is not my choice of a place to live.  

I would be interested to see the values in the next quarter after the bush fires have stopped puffing out their smoke.

7 comments