Research released today by Onthehouse.com.au has revealed that Sydney’s housing market has surpassed even its own average quarterly growth rate of 3.05 per cent, recording an astonishing 7.58 per cent in the three-month period ending July 2015.

The average quarterly growth rate of all other capital city housing markets was just 0.92 per cent.

This huge increase in value has pushed Sydney’s housing market through the million-dollar benchmark, with the median house now valued at $1,017,500.

 

Market analyst at Onthehouse.com.au Eliza Owen says: “As the growth in Sydney continues to accelerate, there is insufficient evidence attributing foreign investment and tax structures to this surge. However, there is another force to consider – population convergence, a theory utilised by urban studies theorist Richard Florida in 2005.

“Florida found that population and economic activity were converging to a few large cities around the world and evidence suggests that Sydney could be one of these cities. If this is indeed the case, it signals that the growth is likely to continue in the same way we’ve seen values and rents skyrocket in other cities over the last few decades, including Singapore, New York, London and Tokyo.

“Assuming Florida is correct in his theory of population convergence, Sydney could see strong house value increases over the next few quarters before stabilising at a level that even the most wealthy and mobile will find excessive,” Owen says.

Melbourne and Brisbane were the only other capital city housing markets that documented a steady quarterly growth performance, recording 3.10 per cent and 2.83 per cent growth respectively. However, an overhang of stock in the Brisbane unit market saw values drop by 0.86 per cent during the same period.

The worst performing regions in the quarter to July were once again the resource states, as Perth houses contracted 2.11 per cent (-4.34 per cent annually) and Darwin unit values fell by 3.31 per cent (-6.41 per cent annually).