SYDNEY house prices have shown growth in the three months to June since the global financial crisis struck in late 2007, figures show.

The value of the Sydney’s average  home rose 3.7 per cent after five quarters in a row of flat prices, Australian Property Monitors said in a report to be published today.

The result supports other signs that low interest rates, the lowest in 40 years, and a shortage of homes could help Australia avoid house price falls of up to 20 per cent seen overseas.

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And in a possible sign that growth in the market was spreading beyond government-backed first-home buyers, the top half of the market grew nearly twice as fast as the more affordable half.

Meanwhile, separate private-sector figures added to fears of a housing bubble fuelled by a shortage of new homes and apartments coming on to the market.

The property figures come after comments on Tuesday by the Reserve Bank governor, Glenn Stevens, that surging housing demand must be ‘‘translated into more dwellings, not just higher prices’’, which some economists saw as a warning of the next housing bubble.

But an economist with Australian Property Monitors, Matthew Bell, said the strength of the top end of the market showed growth in house prices was a well-rounded recovery, rather than a first-home buyer-fuelled boom.

‘‘When you’ve got the top end participating like that, it’s a good indication that you’re getting back to the levels we saw before prices fell heavily in 2008,’’ Mr Bell said.

After being pulled down by its large financial sector, Sydney was the fourth-fastest growing capital city after Darwin, Hobart and Melbourne. ‘‘Sydney and Melbourne have come back very strongly and really are leading the country, in terms of price rises.’’

The mining state capitals, Perth and Brisbane, are the only cities where house prices were lower than they were in June 2008.

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Housing Industry Association figures, published yesterday, also pointed to a recovery in the property market but hinted at a looming supply shortage.

Detached home sales rose by 18 per cent in the past six months, the report said, but apartment sales had fallen by 20 per cent because developers struggled to access sufficient credit.

The chief economist at CommSec, Craig James, said: ‘‘While more first-home buyers are building their dream homes, investors and developers are either not interested or not able to participate in building new apartments’’.

Sourced from Sydney Morning Herald.

Published by Henry Sapiecha 10th August 2009

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