(Australian Associated Press)
House price growth is outpacing growth in apartment prices, a trend that is expected to continue as more units and townhouses come onto the market.
Average home prices in the eight capital cities rose 1.9 per cent in the three months to June, and 10.2 per cent in the year to June, according to the Australian Bureau of Statistics.
Driving this growth was the value of detached dwellings, which rose 1.9 per cent in the quarter and 11.1 per cent over the year.
Average prices for units, townhouses and terraces rose 1.7 per cent in the June quarter and 6.6 per cent over the year.
Commonwealth Bank senior economist Michael Workman said the gap between price growth for detached and attached dwellings will continue to widen.
“Apartment price growth should be lower given the large amount of new stock coming onto the markets over the next few years,” he said.
“Oversupply issues, for new apartments, are more apparent in parts of Brisbane and Perth than in Melbourne and Sydney.”
Mr Workman said strong inner-city population growth is likely to boost demand in the two largest cities.
Sydney and Melbourne each recorded home price growth of 13.8 per cent in the year to June, and Melbourne was the strongest property market in the June quarter with growth of three per cent.
Hobart had the third highest annual growth rate, with prices up 12.4 per cent, followed by Canberra with 7.9 per cent, Adelaide with five per cent and Brisbane three per cent.
Prices in Perth fell 3.1 per cent and in Darwin fell 4.9 per cent.
Mr Workman said new measures from the federal government and some state governments will reduce lending to property investors and could slow home price growth.
However, the Reserve Bank not expected to lift the cash rate until the second half of 2018, and the jobs market is improving, which should help fuel property demand.
The total value of residential dwellings in Australia was $6.7 trillion in the June quarter, up 4.6 per cent on the March quarter, and the mean price of a home rose by $12,000 to $679,100.