A widely watched index shows home price inflation continued into April, with Sydney continuing to drive the national average higher.
The CoreLogic RP Data Home Value Index showed capital prices up 0.8
per cent last month to post a 2.5 per cent quarterly and 7.9 per cent annual
Outside the capitals, prices remained fairly stable, with a 0.4 per cent fall
last month and a 1.5 per cent gain over the past year that was only slightly
ahead of consumer price inflation.
Amongst the capitals, the largest market of Sydney was driving all the
gains, with a 1 per cent rise last month, 5.4 per cent quarterly jump and
14.5 per cent annual increase.
Sydney residential real estate prices were now up an average 65.4 per
cent since the global financial crisis (GFC) of late 2008 and early 2009.
Melbourne continued to be a distant second, with a 0.8 per cent monthly
gain and 6.9 per cent annual rise.
Melbourne prices were up 52.3 per cent since the GFC.
All other capital city markets were subdued over the past year, with Perth flatlining
and Darwin property losing value, even though Adelaide and Hobart posted strong monthly rises in April.
Australian households are the most indebted in the world, according to research by Barclays, which warns that the country would be vulnerable in the event of another global financial shock.
Barclays chief economist for Australia Kieran Davies says private sector debt-to-income gearing is currently at an all-time high of 206 per cent, up from a pre-global financial crisis (GFC) level of 191 per cent. This put Australia just within the top 25 per cent of the world when it comes to leverage.
However, when it comes to household debt – which includes mortgages, credit cards, overdrafts and personal loans – Australia leads the global field, according to Mr Davies, with credit continuing to pile up while the rest of the developed world is paying it down.
Using nominal gross domestic product, the bank estimates household debt at 130 per cent of GDP, which is the highest level on record.