National median house price rises to over half a million dollars
In the first three months of 2015, home prices in Australia's capital cities rose three per cent, increasing the median house price across the combined capital cities to $530,000.
Seeing this growth following the February rate cut, the increase suggests that property markets are showing the effect of the historically low cash rate of 2.25 per cent. Record low mortgage rates appear to be stimulating the housing markets across most capital cities.
Sydney's median house price recorded a 5.8 per cent surge for the quarter to $690,000. Melbourne prices rose to $518,000 (3.5 per cent for the quarter), with Darwin and Canberra recording increases of $540,000 and $530,000 respectively, according to CoreLogic RP Data's March figures.
Although the RBA held the cash rate at its April meeting, buyer activity hasn't slowed. With a lot of speculation that there will be a second rate cut in the first half of 2015, it's likely that more and more people will look to invest in property.
This growth in house values can be attributed, in part, to investment demand. Investors are active because housing currently offers strong capital gains.
On a side note, Domain has recorded strong results for our major auction cities. Melbourne and Sydney have seen consistently high clearance rates throughout March and April. With the exception of the Easter long weekend, Sydney saw a weekly clearance rate of above 80 per cent and Melbourne sat around 75 per cent between 14 March and 11 April. The national clearance rate on 11 April was recorded at 80 per cent by Domain.
It's a great time to encourage current homeowners to make the most of the low interest rates and reduce their loan principal. It's the perfect time for our clients to reassess their home loan and make sure that it's working for them.