Latest NewsHome Prices Rise As Owners UpgradeFriday, 28 October 2016

Home prices rose across Australia in the three months to September, as investors upgraded to more expensive properties.

The adjusted median price on houses in capital cities rose 3.7 per cent in the September quarter, while prices for units jumped 3.4 per cent, according to Australian Property Monitors.

"The extraordinary recovery at the upper end of the market experienced in June in most major capitals has now spread to the rest of the country," said APM economist Matthew Bell.

"Another quarter of improving employment results and the share market rising by 20 per cent has meant that buyers are stepping into the oversold top end of the market to purchase properties at prices still

below their late 2007 highs," he said.

Owners who sold properties while the full First Home Owner Grant was offered have used their earnings to buy more expensive homes and units, Mr Bell said.

That in turn has put more pressure on the upper end of the market. The full grant ran from October 2008 to September of 2009 and will continue in a reduced form until the end of the year.

More recently, official data from the Australian Bureau of Statistics showed an 8 per cent rise in investment loans in August.

Melbourne's adjusted median house price jumped the most in the nation, rising 6.1 per cent to $487,246. Sydney's house prices gained 3.6 per cent $569,061, while Perth's increased only 1.7 per cent to $494,409,

APM data showed.

So far in 2009, home prices across Australia have increased 7.1 per cent, boosted by a shortage of supply, low interest rates and the expansion of the First Home Owners Buyers grant.

The local economy's growth has defied expectations, measuring only one quarter of contraction while the financial crisis sapped economies elsewhere such as the US and Europe.

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