Melbourne close behind with a spike of 17.5% but ratings agency warns that a rising number of homeowners have fallen behind with payments

This article is more than 3 years old

This article is more than 3 years old

Sydney property prices have increased by almost 20% in just 12 months, putting the city at the front of a nationwide trend that has seen dwelling values increase by 12.9% on average.

Sydney house values soared by 19.65% in the past year, and unit values increased by 15.27%.

New data from CoreLogic, released on Monday, shows house values in Melbourne (up 17.15%), Canberra (13.64%), and Hobart (11.05%) have followed Sydney’s rapid rise. Only homes in Perth (-4.68%) and Darwin (-4.41%) have bucked the trend, slipping backwards over the past year.

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CoreLogic’s five capital city aggregate – which includes Sydney, Melbourne, Brisbane and the Gold Coast, Adelaide and Perth – shows prices for houses and units rose 12.9% on average last year.

But the news comes as the ratings agency Moody’s warned an increasing number of borrowers have fallen behind on their mortgage and car repayments, saying more borrowers are set to join them amid rising underemployment, record-low wages growth and a more difficult housing market.

On Monday, Moody’s said delinquencies for prime residential mortgage-backed securities increased to 1.61% in January, from 1.57% in December, while 30-day delinquencies for car loan asset-backed securities rose to 1.80%, from 1.54% over the same period.

“Weaker economic conditions in states reliant on the mining industry, rising underemployment, weak wages growth and less favourable housing market conditions will drive delinquencies higher,” vice president and senior analyst Alena Chen said on Monday.

On Friday the banking regulator, the Australian Prudential Regulation Authority (Apra), wrote to major lenders warning them to tighten their lending practices on investor and interest-only loans.

Wayne Byres, Apra chairman, said banks must be mindful of the “heightened risk in the lending environment”, and said they should “appropriately respond to these conditions” by changing their lending standards and practices.

He asked them to limit their growth in lending to investors, advising that growth rate should remain “comfortably” below the previously advised benchmark of 10%.

The CoreLogic data shows a split has emerged between Australia’s house and unit prices, with unit prices growing far slower relatively. House prices in Australia’s five major cities grew 13.35% over the last year, compared with 9.83% for units and apartments.

There was not much difference in Sydney (house prices: 19.65%; unit prices 15.27%).

But the difference was pronounced in Melbourne (house prices: 17.15%; unit prices 5.15%), Canberra (13.64% vs 1.62%), Hobart (11.05% vs 2.66%), and Brisbane (4.02% vs 0.17%).