ABS Housing Report
The Australian Bureau of Statistics [ABS] report show a lack of new housing and tight rental markets have put a floor under Australian house prices, according to the Housing Industry Association (HIA).
Following on from recent findings showing housing affordability declining over the June quarter, today's official numbers from the ABS confirm that prices climbed by 3.1% across Australia to an average annual growth rate of 6.4% more than double the rate of inflation over the same period.
According to the HIA, the long-held relationship between higher interest rates and falling house prices is likely to be somewhat disconnected for the rest of the decade.
HIA's Executive Director of Housing and Economics, Mr. Simon Tennent, said that higher rates will clearly reign in discretionary spending and have already taken the wind out of the sales for the building industry.
However, with an estimated shortage of some 25,000 dwellings nationwide, demand pressures will keep prices high.
"The challenge of putting an affordable product on the ground remains as difficult as ever and today's figures again confirm that the cost of building a new home has barely been higher than inflation up 3.2% on last year while land prices have continued to ratchet up, rising 14% over the same period," Mr. Tennent said.
"As the debate about declining affordability rages, it is crucial that the pressure is lifted off the housing sector by increasing the supply of affordable housing and attracting private rental investment.
Lowering the cost of land and easing the tax and regulatory burden on Australia’s building community is an obvious and immediate step in the right direction," he said.
House prices rose in all cities: Perth (+11.9%), Darwin (+3.6%), Canberra (+2.6%), Adelaide (+2.3%), Brisbane (+2.1%), Melbourne (+2.0%), Hobart (+2.0%) and Sydney (+1.4%).
For brand new homes (excluding the land cost) prices rose in all cities, up 4.1% in Darwin, up 3.9% in Perth, up 1.5% in Brisbane, up 0.9% in Canberra and Hobart, up 0.8% in Adelaide, up 0.6% in Melbourne and up 0.5% in Sydney
.