House prices in Sydney have surged by 14 per cent over the past year, a figure far higher than the rest of the country, according to new data released by Domain Group.
While the average capital city house price rose by 7.9 per cent in 2014, some areas in Sydney like the upper north shore shot up by 21.8 per cent, according to the Domain Group House Price Report.
Melbourne’s house price growth was considerably lower at 3.4 per cent, down from the 10 per cent growth seen in 2013.
Sydney’s median house price is now $873,786, while Melbourne’s is $610,470.
Domain Group senior economist Dr Andrew Wilson said Sydney house prices would continue growing at double figures over 2015.
He also said he expected the median Sydney house price to pass $900,000 “sooner rather than later”.
Darwin was the only capital city where house prices fell, shedding 6.8 per cent in 2014.
In Brisbane, house prices grew 6.1 per cent, and in Hobart 4.1 per cent.
Prices flatlined in Perth and Canberra, growing at 0.2 per cent and 1.4 per cent respectively.
RP Data senior research analyst Cameron Kusher said he believed peak growth value had passed.
“We would anticipate that the rate of growth will continue to slow through 2015 despite the low interest rate environment,” Mr Kusher said.
“Affordability hurdles in Sydney, and to a lesser extent in Melbourne, are making it increasingly difficult for some buyers to enter the market.
“Additionally, low rental yields and the likelihood of tougher lending criteria to investment buyers will likely dampen the very active investor segment of the market which may in turn reduce housing demand in 2015.”