AAP
Property prices in capital cities rose nine per cent in the past year, but that growth has slowed in the three months to September.
Capital city house prices rose 1.5 per cent in the September quarter, and 9.1 per cent in the year, the Australian Bureau of Statistics said on Tuesday.
Price growth slowed slightly in the September quarter, from 1.9 per cent in the June quarter.
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The figures showed the property market boom was mainly occurring in Sydney, where annual growth of 15 per cent was more than double that experienced in any other capital city, JP Morgan economist Tom Kennedy said.
“Prices are slowing down a little bit but they’re falling to levels that we think will be more sustainable over the long term,” Mr Kennedy said.
“The growth we saw last year can’t be sustained and that could lead to problems if it did.
“The fact that we’ve slowed down is probably a good thing and we think it’ll probably slow down a little more.”
Perth was the only capital city to experience price falls in the quarter, down 0.1 per cent.
Easing mining investment has dampened demand for labour, slowing population growth and therefore house price growth, Mr Kennedy said.
Commonwealth Bank senior economist Michael Workman said an increase in housing supply over the next year, as suggested by building approvals figures, would slow house price growth in Sydney, Melbourne and Brisbane.
“It’s quite clear in most of the data that’s it’s the eastern seaboard where most of the activity, price wise, is occurring,” Mr Workman said.
“It’s also where most of the new building is underway and there’s a lot of new stock coming over the next year, so there will be this change in the market that will dampen house price growth over the coming year.”