Australian House Prices Up Just 1% In A Year

House prices in Australia stuttered to just below a 1% increase in 2012 after falling in the previous year.

The modest rise was better than the performance of most global house markets, but prices will remain in the doldrums, according to research by Fitch Ratings.

The firm also predicts mortgage defaults and repossessions in Australia will be among the lowest in the world.

Like most countries, Australia has a regional housing economy, and while the nation’s average values will stay static, some will rise and fall – and one to see a drop is likely to be The Gold Coast around Brisbane.

Despite fears of further house price falls late in 2012, the market seems to have bounced back, with house builders in New South Wales and Victoria reporting growth of 16%, while those in South Australia enjoyed a 6.7% boost.

Affordability problems

Fitch Ratings analyst Ben Newey said: “Homes are not cheap in Australia and many cannot afford to buy, but prices are holding up and are likely to continue to do so, supported by a series of cuts in interest rates.”

Meanwhile, in New Zealand, house sales are running below average despite a rally in 2012, says the Real Estate Institute of New Zealand. (REINZ).

Sales surged by a fifth to the highest level since the downturn in 2007, the latest official figures show.

But chief executive Helen O’Sullivan, explained the trend ran at a higher level of sales – and was well below the peak of 120,000 home sales in 2003.

“A new record median price and robust volume growth saw the New Zealand real estate market end 2012 on a strong note and positioned for those trends to continue into 2013,’ she said.

Record prices in New Zealand

Most sales were in the North Island capital, Auckland, and the CanterburyWestland region on the South Island. Combined, these areas accounted for more than half of all sales and saw price rises that were higher than elsewhere.

Other strong sales performances were in Central Otago Lakes and Wellington, which both saw resurgent markets and more sales.

The national median house price increased 1.5% by NZ$5,750 to a record high of NZ$389,000 in December.

Canterbury/Westland’s median house price was up 1.7% from November to a record NZ$351,000, but Auckland’s median house price dropped by NZ$5,000 to NZ$535,000.

The national median house price increased 9.6% compared to December 2011. Prices in Auckland performed even better – up 10.5% compared to a year earlier.