Property investment specialist Future Estate has predicted domestic house prices will continue to increase on the back of several influencing factors, including improved loan affordability, solid economic fundamentals and a stable mortgage market.
Other elements leading to the optimistic forecast were strong investor demand and pent-up demand for homes.
“Australian house prices are not only sustainable but are likely to continue to rise, albeit at a more moderate pace in the second half of 2014, before growing broadly in line with average household incomes in the medium term,” Future Estate said in its latest residential market update.
Sydney is the capital city that continues to lead the way in regard to residential property values, having experienced a 14.3 per cent increase over the past year. This rise is significantly more than the second best-performing city, that being Melbourne, where dwelling values jumped by 8.1 per cent over the same period.
Dwelling values were now 9.3 per cent higher over the 12 months to the end of September 2014, with every capital city recording an increase over this period, the market update said.
Having experienced many months of pricing volatility, Adelaide emerged as the best performer for the month of October, witnessing residential property capital gains of 3.1 per cent.
In regard to the rental market in capital cities, Darwin generated the highest prices for both houses and units, recording median rental rates of $660 a week and $550 a week respectively.
Sydney ranked second for both types of dwellings, commanding a median weekly rental amount of $525 for a house and $500 for an apartment.
For houses, Canberra was the third best-performing city with a median rental of $480 a week.