Data recently released by the Australian Bureau of Statistics show evidence of a national turnaround in house prices. However, there are significant variations between cities in the movement of property prices.

Overall, the average price of established houses in Australia rose by 2.1% in the December quarter 2005, in contrast with the September quarter, in which prices remained flat. All main cities showed some increase in property prices in December 2005, Perth and Darwin leading at 6.6% and 6.1% respectively, while the rises were more modest in other parts of the country. Sydney experienced its first quarterly increase over the past year, at 1%.

Compared with the December quarter 2004, all cities except for Sydney experienced a substantial increase in residential property prices, with Perth and Darwin seeing major price hikes of 22.5% and 23.2% respectively. House prices in Sydney fell by -3.9% over the year to December 2005, but the quarterly data suggests that they may now be picking up.

The table below shows the changes in property prices for eight Australian cities for the December quarter 2005 compared with September 2005, and also a comparison with the year before:

	% change Sept-Dec 2005	% change Dec 04 - Dec 05
Perth	+6.6	+22.5
Darwin	+6.1	+23.2
Melbourne	+2.3	+2.9
Brisbane	+2.0	+3.5
Hobart	+1.8	+5.4
Adelaide	+1.1	+3.4
Sydney	+1.0	-3.9
Canberra	+0.9	+0.8

Source: Australian Bureau of Statistics

It is not yet clear whether the improved state of the housing market will lead to an increase in interest rates. However, taking into account the current rate of inflation and economic policy, financial commentators do not expect interest rates to change in the near future. Enquire now to secure the most favourable rate of interest on your mortgage.