Dwelling values across Australia's combined capital cities recorded a 0.5 per cent increase in August 2013 according to RP Data-Rismark's Home Value Index, taking the cumulative gain in home values to 7.0 per cent since the market bottomed out in May last year.
The August result was a slowdown from previous months in which capital gains had been recorded at much higher rates. Nevertheless, the August result took the rolling three-month change in capital city dwelling values to 4.0 per cent – the highest rate of capital gain since the three months ending April 2010.
According to RP Data research director, Tim Lawless, the slower month-on-month result was a welcome sign after the strong growth conditions of previous months had fuelled renewed debates around the sustainability of Australian dwelling values.
"The half a per cent gain over the month of August is a much more sustainable rate of growth and will be a welcome turn of events for policy makers," Mr Lawless said.
"While the recent surge in dwelling values has caused some renewed debate about an Australian housing bubble, it is important to remember that the average annual capital gain over the past decade has been just 4.3 per cent across the combined capital cities.
"In Sydney the annual rate of growth has seen a much lower decline of 2.4 per cent which is well below current inflation."
RP Data noted that softer housing market conditions over August could be attributed to a lower rate of growth across the Sydney and Melbourne housing markets, where dwelling values rose by 0.6 per cent and 0.2 per cent respectively. Several cities recorded a fall in values over the month, with Hobart posting a 1.2 per cent decline, and Perth values slipping by 0.2 per cent.
Mr Lawless said the most significant turnaround in market conditions had occurred in Brisbane, where the monthly rate of growth jumped to 1.5 per cent.
"Brisbane's housing market has been underperforming since the onset of the GFC with home values still almost 10 per cent lower than their previous peak which was back in November 2009," he explained.
"The strong result for August was evident across both the detached housing and the unit markets and may potentially mark a positive turning point for Brisbane's housing market."
Looking at the performance across the broad-pricing segments of the market, the RP Data-Rismark Stratified Hedonic Index continued to show the broad-middle segment as the best performing, although the rate of capital gain had gathered some momentum at the more prestigious end of the market.
The broad mid-priced market recorded a capital gain of 5.2 per cent since the start of the year, while the most expensive quartile had seen values increase by a less substantial 4.9 per cent. The most affordable quartile recorded the lowest rate of growth at 4.4 per cent.
Mr Lawless went on to predict strong housing market conditions for this year's spring season.
"Housing market conditions are looking set to provide what could be described as a near-to perfect spring season with the number of homes currently available for sale around 15 per cent lower than a year ago," he said.
"In Sydney, listing numbers are about 28 per cent lower than a year ago. The lower effective supply levels are a result of fewer new listings being added to the market and a higher rate of absorption, with a 30 per cent increase in sales activity compared with a year ago.
"We are already seeing a substantial increase in real estate agent activity across the RP Data platforms which indicate a surge in pre-listings activity," Mr Lawless concluded.
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