Adelaide home prices sluggish

Australian capital city home prices have risen more than five per cent in the past year, with the Sydney and Perth property markets leading the charge.

Home prices across the eight state and territory capitals rose 5.3 per cent in the 12 months to August, according to the closely-watched RP Data-Rismark Home Value Index.

Perth experienced the biggest increase during the year, with home prices up more than nine per cent, while Sydney’s were up seven per cent.

Adelaide failed to keep pace with inflation, rising just 0.5 per cent for the year.

Hobart fared the worst, with prices down 1.1 per cent over the year.

Sydney was the strongest performer during the past three months, with prices up 5.4 per cent in that period.

RP Data research director Tim Lawless said the rate of increase in prices slowed to 0.5 per cent nationally in August.

“The half-a-per-cent gain over the month of August is a much more sustainable rate of growth and will be a welcome turn of events for policy makers, ” he said.

Rismark chief executive Ben Skilbeck said investors, rather than owner-occupiers, were likely to drive most of the growth in home prices during the coming months as they took advantage of low interest rates and solid returns.

“While the owner-occupier segment of the market is more than twice the size of the investor segment, there continues to be a number of indicators suggesting that this spring investors will be punching above their weight, ” he said.