The Perth property market has been the worst performer in the country over the June quarter, recording a drop in prices while the capital cities grew 4.7 per cent. 

Established house prices in Perth fell 1 per cent over the period, while units slid 0.6 per cent, figures released on Tuesday by the Australian Bureau of Statistics show. 

Sydney came out on top after growing more than twice as fast as any of the other capital cities.  

House prices in the harbour city surged by a staggering 9.8 per cent over the June quarter, while units rose 6.9. 

Meanwhile, strong activity in Melbourne pushed house prices up by 4.7 per cent and units by 2.5 per cent. 

The strength in Melbourne and Sydney bumped up the national growth. House prices increased in Brisbane (0.9 per cent), Adelaide (0.5 per cent), Canberra (1 per cent) and Hobart (0.1 per cent), while it also fell in Darwin (-0.5 per cent). 

Domain Group senior economist Andrew Wilson said Sydney’s growth over the June quarter was the strongest quarterly result in the modern era. 

He attributed the strong growth achieved by Melbourne and Sydney to the drop in cash rates. 

“The cut in February was topped off by another cut in May, and that’s created all that momentum in the market,” Dr Wilson said.

“We had auction clearance rates pushing up around 80 per cent in Melbourne, and Sydney recording its highest ever clearance rate at [close to] 90 per cent [in May].”

The extraordinary house price growth was also recorded by the Domain Group, which uses a similar “mix adjusted” methodology as the ABS. It shows Sydney’s median leapt by 8.4 per cent over the June quarter to $1,000,616.

Meanwhile, another property analyst CoreLogic RP Data reported a 3.4 per cent rise. 

The residential property price index for the weighted average of the eight capital cities follows a rise of 1.6 per cent for the March quarter.

Dr Wilson believed both the Melbourne and Sydney markets had peaked over the June quarter in terms of the price cycle. 

“We have seen clearance rates falling since then; certainly clearance rates are holding in Melbourne but they are nearly 10 per cent below where they were in autumn, and in Sydney they’re nearly 20 per cent below where they were.

“We are highly unlikely or we will not see a near level of this prices growth…over the September quarter.

“In fact, the Sydney numbers are highly unlikely to be ever repeated again, although you can never say never.”

LJ Hooker National Research Manager Mathew Tiller also expected the rate of growth to slow in Sydney and Melbourne. 

He said the ABS figures reflected the tail-end of the strength of investor demand seen over the past 12 months. 

Moving forward, he said the lending restrictions placed on investors by the Australian Prudential Regulation Authority and the banks would slow this buyer segment. 

“An increase in listings….over the next few months is also going to help bring this growth rate back to a more sustainable level in both Sydney and Melbourne,” he added.