Melbourne, Sydney ‘shot the lights out’ in property prices

Property prices in Melbourne climb 1.5 percent while Sydney’s annual rate of growth is now 18.4 percent. Corelogic, a leading provider of consumer, financial and property information, analytics and services to business and government, said the annual growth rate of the two capitals is the strongest so far in 12 months.

Sydney and Melbourne "shot the lights out" early this year according to CoreLogic's head of research for Australia, Cameron Kusher. "If anything we're actually seeing more strength in Sydney and Melbourne than we've seen over the last few months," Kusher told ABC News Online.

The current asking prices in Sydney and Melbourne have leapt this month based on a data from SQM Research. Corelogic says Sydney now has the most significant compression in rental yields in the past five years.

"The annual growth rate across the combined capitals hasn't been this strong since the 12 months ending June 2010," Corelogic head of research, Tim Lawless, said. News.com.au noted that nationally, huge gains for Melbourne and Canberra lead to higher home prices, 1.4 percent higher over the month and 11.7 percent up over the past year.

He believes that the renewed strength is not coming from first home buyers at this time, but to property investment, specifically after the Reserve Bank cut interest rates twice in 2016."It's pretty clear it's not coming from first home buyers at the moment, we've pretty much got record low levels of first home buyer activity," he explained. Kusher said the boom counters several predictions that claim property price growth will slow down this year.

Some analysts are not surprised with the growing property price. These include SQM Research's Louis Christopher, who forecasted that further strong gains for Sydney and Melbourne can be expected this year.

But the west and north of the nation have a different fate. ABC notes that Perth and Darwin are resuming their property price slide. Darwin suffered a large 4.3 percent monthly slide, while Perth prices were down to 2.4 percent in February and 4.5 percent over the past year.

Kusher observed that amid centric growth phase in Sydney and Melbourne, a spill out into Canberra and into Hobart has started. “But most other capital cities are either seeing values fall or very little growth," he added. Meanwhile, advertised listing numbers are still low across the hottest housing markets according to Financial Review. The publication notes that listings in Sydney are tracking 11.3 percent lower than the same period in 2016.