Growth in Australian property prices is slowing, according to latest RP Data figures which show a 1 per cent rise over October.
House prices grew a mere 0.1 per cent in September, calming concerns about a property housing bubble.
Despite a slow two months, dwelling values still rose 2.2 per cent for the three months to the end of October.
But price growth remains uneven, with only three capital cities recording higher home values over September.
Melbourne values grew fastest, up 1.9 per cent to hit a median price of $555,000, while Sydney grew 1.3 per cent for the month, to a median price of $680,000.
Brisbane rose just 0.6 per cent, but Adelaide fell back 1.1 per cent and Perth was down 0.1 per cent.
Hobart and Canberra recorded the biggest falls, down 2.4 per cent and 2.3 per cent respectively.
RP Data’s chief economist Tim Lawless said growth in house prices would continue to moderate.
He said Sydney was the “standout” performer with home values increasing at a rate of more than 1 per cent a month, up 3.9 per cent over the past three months.
Mr Lawless said Perth and Canberra have clearly moved through the peak of their growth cycles.
The consistent rise in house prices has caused rental yields to compress to record lows, with Melbourne rental yields at just 3.3 per cent. Sydney’s average yield is 3.7 per cent.
Mr Lawless said capitals with lower or falling price growth, particularly Darwin and Hobart, had “a much healthier yield profile with the typical dwelling providing a gross yield of 5.4 per cent and 5.9 per cent respectively”.
This article first appeared in The Australian Business Review