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Top end property markets driving price rises

Top end property markets driving price rises

Property price growth across the capitals is being driven from the front, with the most expensive suburbs in the biggest markets seeing the strongest growth.

Value growth has been strongest in the most expensive suburbs of the largest capital city markets, according to analysis by CoreLogic RP Data.

Dwelling values for the five biggest capital cities rose 6.4% over the 12 months to March – a slowdown from the 9.8% rise over the 2014-15 financial year, the report found.

But percentage movements deviated from this figure, sometimes significantly, when broken down across the top, middle and affordable segments of each city's property market.

CoreLogic defines a capital's top-end market as being the most expensive quarter of all suburbs; the middle 50% of suburbs as the middle market; and the bottom quarter of all suburbs as the city’s most affordable market.

Overall, prices went up 7% for the most expensive quarter across the five capitals, 6.6% for the most affordable quarter and 6.4% for the middle, indicating strongest performance at the top end.

But CoreLogic data analyst Cameron Kusher noted that "while the annual figures show the most expensive suburbs recorded the strongest value growth over the past three months, value rises have been more uniform and with little difference between the broad value-based segments of the market".

Segments that performed notably better over the year than the average 6.4% increase included Melbourne and Sydney's most expensive quarters, up 10% and 8.8% respectively.

Both cities' bottom markets also performed well, however, recording 12-month value rises of 9.7% and 8%.

Segments that saw value growth below the combined capital city average included Perth's top quarter and middle market, where prices fell by more than 2% and 1.5% respectively over the year.

Perth was the only one of the five capitals where property prices went backwards over the year to March.

Prices in Adelaide's most affordable suburbs only went up by 2.9%, another relatively weak-performing segment.

Kusher argued this analysis "highlights the importance of looking beneath the broad headline [price] figures".

“Markets within a city can be performing quite differently to what the over-arching statistics for a capital city market shows, not only across valuation-based segments of the market, but also across housing types and geographically," he said.

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