The total value of Australia's 9.9 million residential dwellings increased by $145.9 billion to $6.7 trillion.
The mean price of dwellings in Australia rose by $12,100 over the quarter to $679,100.
According to figures released by the Australian Bureau of Statistics (ABS), residential property prices rose by 1.9 per cent between the March and June quarters, or by 10.2 per cent on the same period last year.
Sydney and Melbourne markets both rose by 13.8 per cent over the year, but the Melbourne market grew more rapidly between the March and June quarters (rising by 3 per cent, compared to Sydney’s 2.3 per cent).
Hobart followed in third place, with prices rising by 12.4 per cent year-on-year, or 1.8 per cent between the March and June quarters.
However, price growth in the Australian capital cities was less drastic; Adelaide, Brisbane and Canberra prices rose by 5 per cent, 3 per cent and 7.9 per cent, respectively, over the year.
On a quarter-on-quarter basis, Canberra grew by 1.3 per cent, Brisbane by 0.6 per cent and Adelaide by 0.8 per cent.
However, Darwin and Perth both saw drops in price over the year (4.9 per cent and 3.1 per cent, respectively).
Darwin saw the greatest fall in prices between the March and June quarters, with a 1.4 per cent drop.
Bruce Hockman, chief economist for the ABS, commented: "Residential property prices, while continuing to rise in Melbourne and Sydney this quarter, have begun to moderate. Annual price movements ranged from -4.9 per cent in Darwin to +13.8 per cent in Sydney and Melbourne. These results highlight the diverse housing market and economic conditions in Australia's capital cities.”
The disparity in the market conditions across the country has led some to call for changes to the way the market is regulated.
Senator Nick Xenophon revealed this week that he will help introduce legislation in 2018 that will change APRA's mandate to include competition, and require it to consider the differences in the housing market when bringing in macro-prudential measures.
Touching on APRA’s macro prudential measures to limit investor lending, he said: “These rules, intended to cool the overheated housing markets in Sydney especially, and Melbourne too, are too blunt an instrument.”
“They fail to take into account that the housing markets of, say, Townsville and Adelaide, and for that matter Rupanyup and Minyip, are very different from the frenzied markets of Sydney and Melbourne.
“A more nuanced, calibrated approach is needed, and that could be achieved if APRA is required by law, in its objectives, not only to take into account its financial stability mandate, as it must, but secondary factors such as competition in the banking sector.”
As such, Mr Xenophon announced that he would help introduce legislation next year to “require APRA’s mandate to also include competition in the banking sector, to consider the differences in our housing markets between the two biggest cities and the rest of the nation (especially the regions) and also to require APRA to give weight to the impact a bank in a small regional community can have”.
“These seemingly little changes to APRA’s mandate can make an even bigger difference,” the senator said.
Annie Kane is the editor of The Adviser and Mortgage Business.
As well as writing about the Australian broking industry, the mortgage market, financial regulation, fintechs and the wider lending landscape – Annie is also the host of the Elite Broker and In Focus podcasts and The Adviser Live webcasts.