Canberra home values increased by the most in the country in the past quarter, but the longer-term growth remains subdued, new data shows.
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The RP Data-Rismark July home value index, issued on Friday, showed Canberra homes increased in value by 2.1 per cent in the past three months.
This was just 0.1 per cent above Sydney and 0.3 per cent above Melbourne.
House growth led the strong performance for the capital with an increase of 2.4 per cent while units fell 1.3 per cent over the past three months.
Although Canberra was rated the best performing city for the quarter an economist says it is really just a blip in an otherwise subdued housing market.
RP Data research director Tim Lawless said the index showed surprisingly strong results across the Canberra market recently, but the longer-term trend was not quite as positive.
In the past 12 months, Canberra homes have increased by 1.9 per cent, the second worst growth rate of the capital cities and well below the 10.2 per cent of combined capitals growth.
“The marketplace has been relatively soft we aren’t seeing values rise very much at all, in fact they’re rising at a lower pace than inflation over the past 12 months,” Mr Lawless said.
“We’ve also seen sentiment levels across that marketplace relatively subdued post-budget for obvious reasons which generally means you wouldn’t expect housing market conditions to show a sustained bounce back.”
Mr Lawless said since June 2012 capital city dwelling values had trended higher, led by Sydney where values have increased by 25 per cent.
Canberra and Adelaide are labelled as the two cities with the lowest rate of capital gains, recording 7.9 per cent and 5.5 per cent respectively.
Mr Lawless said the positive result for the territory in the past three months could be partly attributed to a lack of stock on the market.
“We’ve seen a real slowdown in listing numbers so it looks like prospective vendors are really battening down the hatches so to speak, nobody wants to sell their property in a marketplace that’s relatively depressed,” he said.
The index complements data released last week by Australian Property Monitors that showed Canberra’s median house price had grown by the second highest amount in the country in the June quarter.
But Australian Property Monitors and Domain Group senior economist Dr Andrew Wilson said time would tell whether the positive news was more than the typical volatility Canberra’s market has experienced.
Australian Bureau of Statistics data issued on Thursday showed building approvals slumped in the territory by the largest amount for the second consecutive month.
In trend terms approvals fell by 15.2 per cent in Canberra.
According to the RP Data-Rismark index Sydney was the most expensive city with a median dwelling price of $650,000 and least expensive city was Hobart with a median dwelling price of $300,000.