Residential property price growth is set to slow across Australia this year due to low wage growth and inflation, along with oversupply concerns in some parts of the country.
Property experts forecast that home prices down under will rise by about 5% nationally this year, down from growth of 10% in 2016, as the likelihood of another Reserve Bank interest rate cut weakens and previous booming markets in Sydney and Melbourne start to cool.
CommSec chief economist Craig James said: “We are expecting slower growth, in the region of 3-5%.
“However, we had underestimated the demand that was out there in 2016. The Sydney market still remains quite buoyant.”
But while the markets in Sydney and Melbourne have boomed, prices in Perth and Darwin dropped as the mining boom fizzled out, while other cities have been broadly flat.
“It’s basically been Sydney and Melbourne then daylight comes next,” James added.
An analysis of Real Estate Institute of Australia data shows that Sydney’s house prices have increased by 100% in the past decade, while home prices in Melbourne rose 94%, Darwin by 57%, Adelaide by 51%, Canberra by 51%, Brisbane by 45%, and Perth and Hobart by 23%.
Data from CoreLogic shows that Sydney’s median house price of $852,000 (£515,600) is more than double Brisbane’s $486,000 (£294,100) and far exceeds Melbourne’s $641,000 (£387,900).