Australian capital city house prices are rising at their greatest pace in three years.
Mid-level properties are making the most gains, with Sydney by far the fastest growing market.
House prices in Australia’s capital cities rose by an average of 1.3 per cent in October, although Perth, Hobart and Canberra went backwards.
The 7.9 per cent annual growth pace was the fastest in three years, as the median capital city house price rose to $511,000, research from RP Data-Rismark shows.
St George Bank economist Besa Deda said a lack of new housing supply was driving prices higher, especially in NSW where Sydney’s median house price stands at $610,000.
“Low mortgage rates and pent-up demand are helping spur strong price growth in housing,” she said.
“Not surprisingly then, Sydney is also where house price growth is strongest.”
Commonwealth Bank economist Gareth Aird said home owners were feeling the positive wealth effects of owning a piece of real estate.
Sydney house prices rose by 2.4 per cent in October for an annual gain of 11.6 per cent, the strongest year-on-year rise since mid-2010.
Melbourne also did well, rising by 1.2 per cent in October for an annual pace of 7.8 per cent.
Perth, Brisbane and Canberra house prices posted moderate annual gains, but price rises were more subdued in Adelaide and Hobart and Darwin lost ground over the year.