Property prices in Melbourne and Sydney continue to zoom ever higher, rising 3.1% and 2.7% respectively in the September quarter according to Domain's latest housing report.
For the year, Melbourne saw median prices rise a whopping 9.1% – more than four times that of Sydney's 2.1% annual increase.
And it's doom and gloom for the mining states of Western Australia and the Northern Territory, with median house prices in Perth and Darwin sinking 2% and 3.3% in the September quarter respectively. Over the year, home prices have swooned 3.8% for Perth and are down 10% in Darwin. The median house price in Perth is at its lowest level since 2013 says Domain.
Sydney's median house price is now back above its previous record at $1,068,303, while Melbourne's is at $773,669 – another record.
As Domain chief economist Andrew Wilson said, "This is clearly a two-speed housing market, maybe three speed. Melbourne and Sydney are in front and maybe it's second gear for all the other markets except Darwin and Perth. They're in reverse still."
| City | Sep-16 | Qtr change | Annual change |
| Melbourne | $773,669 | 3.10% | 9.10% |
| Sydney | $1,068,303 | 2.70% | 2.10% |
| Hobart | $338,703 | 2.30% | 1.50% |
| Canberra | $661,912 | 0.40% | 4.90% |
| Adelaide | $494,911 | -0.30% | 2.80% |
| Brisbane | $521,152 | -0.90% | 3.20% |
| Perth | $566,609 | -2.00% | -3.80% |
| Darwin | $595,466 | -3.30% | -10.00% |
| National | $752,879 | 1.70% | 3.50% |
Median House prices. Source: Domain
Despite the imminent threat of falling values for apartments, mainly in Australia's East Coast cities, the Melbourne median unit price rose 4.5% to $466,779, while Sydney saw a modest gain of 1.1% for the quarter. According to Mr Wilson, the growth in Melbourne is mainly in the inner and middle-ring suburbs. In contrast, units in Docklands, Southbank and Melbourne's CBD slumped 4.5% during the quarter.
Perth, Canberra and Brisbane all saw median apartment prices sink. Brisbane's median unit price of $367,518 is the lowest in nearly four years according to Domain.
| City | Sep-16 | Qtr change | Annual change |
| Melbourne | $466,779 | 4.50% | 5.50% |
| Hobart | $403,775 | 1.30% | -1.30% |
| Sydney | $685,865 | 1.10% | 0.90% |
| Darwin | $448,418 | 0% | 3.90% |
| Perth | $364,752 | -0.80% | -6.20% |
| Adelaide | $301,939 | -1.30% | 2.50% |
| Brisbane | $367,518 | -2.90% | -3.80% |
| Canberra | $251,073 | -9.20% | -11.70% |
| National | $536,294 | 1.30% | 1.20% |
Median Unit prices. Source: Domain
Much of the gains can be attributed to low interest rates with the major banks Australia and New Zealand Banking Group (ASX: ANZ), Commonwealth Bank of Australia (ASX: CBA), National Australia Bank Ltd (ASX: NAB) and Westpac Banking Corp (ASX: WBC) offering mortgages with rates of under 5%, while several smaller lenders are even offering mortgages with rates of less than 4%.
And low interest rates appear likely to continue as weak global growth continues to see inflation at very low levels. That could see most of Australia's capital cities continue to see decent growth in property prices.
