Capital city house prices rebound

  All capital cities recorded house price rises over the December quarter for the first time since March 2010, according to an APM report / File Source: Leader

DARWIN house prices have soared 10 per cent to show the strongest growth in the nation, according to the latest real estate data.

But they are slowing - and have still not clawed their way back to their 2011 peak, research group Australian Property Monitors (APM) data shows.

The median Darwin house price rose to $629,924 in the December quarter, a 10.2 per cent increase on December last year according to APM's December House Price Report.

The Perth housing market has also rebounded strongly to record a 6.1 per cent rise over the same period, coming in second behind Darwin.

The data highlights the two-speed nature of the Australian housing market, whereby Darwin and Perth recorded strong annual house price growth on the back of the ongoing mining investment boom and tightening supply.

Solid annual growth was also recorded in Sydney, where prices outpaced inflation. Elsewhere, however, house price growth remained fairly weak, with values either falling over the year, or growing at rates below inflation.

But all capital cities recorded house price rises over the December quarter for the first time since March 2010, according to the report.

National median house prices rose by a solid 1.9 per cent over the quarter and units by 1.6 per cent.

Sydney has illustrated the resilience of its housing market with median house prices hitting a record - a whopping $656,415 - for the quarter.

APM senior economist Dr Andrew Wilson said Sydney had the only property market in the nation that had recovered to its pre-crash highs.

Mr Wilson said Darwin still suffered from a shortage of rental properties with workers' camps not yet taking the heat off the rental market.

He said project managers were moving in, and fly-in-fly-out workers were also boosting the rental market.

Mr Wilson said there was increasing confidence in the broader market with a decrease in interest rates and improving commodity prices.

Major export markets China and the US were also reporting more optimism in their growth outlook, he said.

"Looking ahead in 2013, activity will depend on the direction of local economies, as it is no coincidence that the better performing housing markets in 2012 reflected better-performing economies - particularly in relation to unemployment levels," said.

"With a rising sharemarket and an improving international outlook, the general economic landscape and prospects remain optimistic, which is unequivocal good new for Australia's recovering housing markets."

Real estate commentators point out that the APM data has a wide divergence with the RP Data-Rismark daily hedonic index, which recorded a 1.2 per cent fall in dwelling values nationally over the December quarter, with falls recorded in every capital city market except Perth and Darwin.

APM uses a similar median methodology to the Australian Bureau of Statistics (ABS), suggesting that the ABS will also record some growth nationally when its house price index is released next week.

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