Property hot spots

So apparently Australia's property downturn is over. Figures show an increase in national house prices, auction clearance rates that are up, a rise in rental yields and a recovery in housing finance (for owner-occupiers).

All indications – for now – are that our market has seen the worst.

Well, that news must be raising a few eyebrows in Perth. "Seen the worst?" West Australians must be thinking. "How much better can it get?"

In Perth, and other centres in Western Australia, eager buyers are queuing outside of open houses and multiple offers are made on the spot. Conditions sound similar to what the eastern seaboard experienced several years ago.

And by all accounts the story is the same in Darwin.

Both Darwin and Perth have seen phenomenal price growth in the past year – official stats show each enjoyed a rise of about 23 per cent to December.

This compares with 5.4 per cent in Hobart, 3.5 per cent in Brisbane, 3.4 per cent in Adelaide, 2.9 per cent in Melbourne and just 0.8 per cent in Canberra. Sydney property prices lost 3.9 per cent.

The huge regional divergence is a function of two things.

No1 is that the boom hit first in Sydney and Melbourne. These capitals rose far and fast, and left the rest of the country playing catch-up.

No2 is the resources boom. As mining hot spots, demand is naturally sky-high in WA and the Northern Territory.

WA also registers the fastest growth in overseas immigration and is one of only three states with positive population flows from interstate.

16th March 2006

Source: AFR