According to The Australian Financial Review, unseasonably festive season sales and auctions against record low stock levels gave house prices another price boost in January with Sydney and Melbourne recording the highest growth, Corelogic's January Hedonic Home Value Index shows.
Sydney posted a 1 per cent rise in dwelling values while Melbourne rose 0.8 per cent. Every other capital city, except for Darwin, recorded rises resulting in an overall combined capital states 0.7 per cent growth.
Year on year, Sydney values have risen 16 per cent while Melbourne has shot up 11.8 per cent. Since the growth cycle started in June 2012, Sydney dwelling values have increased by a cumulative 70.5 per cent.
The last week of January also saw a strong combined city auction clearance result of 75 per cent.
"While the pace of capital gains remained strong in January, our view is that growth rates will trend lower over 2017, with several factors likely to dampen the strong capital gains trend," head of research Tim Lawless said.
"Affordability constraints are likely to become more pressing, particularly in Sydney, where the dwelling price to income ratio was approaching 8.5 times in September 2016. The deposit hurdle is becoming a larger barrier to entry with additional costs such as stamp duty adding to the high entry costs for housing."
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