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Reproduced with permission.

This year has been a very interesting year for property – some markets have experienced great capital growth, while others have lost value. Let’s have a closer look at each capital city.

Sydney was the best performing capital city in 2015. Home values (including houses and units) increased by 12.8 per cent. It continued on its great growth from 2013 and 2014 but the party is over for Sydney. Property prices won’t fall dramatically but they certainly won’t increase at the same rate as they have in the previous three years.

Melbourne was the second best performing capital city with an annual growth rate of 11.8 per cent. However, there’s a very big difference in price growth in houses versus units. Melbourne houses increased by almost 13 per cent but units increased by less than three per cent. The party will continue for Melbourne into 2016 with better than average price growth, especially in the first part of the year.

Sydney and Melbourne were the stellar performers for 2015. All other capital city markets had much less price growth and in some cases, lost value.

Canberra was the “best of the rest” with a home value increase of 4.5 per cent. However, in a similar fashion to Melbourne, houses grew in value by almost five per cent but units dropped in value by approximately one per cent. Expect more of the same in Canberra – some growth, but not much.

Brisbane home values increased by four per cent. This is well below the average for Brisbane but taking into consideration some of the major natural disasters Queensland has experienced in recent times, a property price increase is a positive. Brisbane will continue to see some growth in property prices in 2016.

My hometown of Adelaide also experienced some price growth in 2015 – not much but some. Home values increased by 3.2 per cent. Even though there’s a terrific amount of infrastructure spending going on at the moment, the impending closure of Holden and uncertainty of the future submarine build is having a negative effect on business and consumer confidence. Despite this, the fact that Adelaide is one of the most affordable property markets in the nation will continue to encourage people to buy into this market and push up prices slightly in 2016.

Hobart also experienced price growth in 2015 – just! With an annual increase in property prices of only 1.1 per cent, it may not be something to crow about but at least the property market is moving in the right direction. Despite this increase, property prices in Hobart are still below where they were around the time the GFC hit our shores. Next year should be a positive year for Hobart and with a bit of luck, property prices will hit a record high. That sounds great but it really means that they will be above where they were seven years ago.

Perth (-4.1 per cent) and Darwin (-4.2 per cent) both experienced similar falls in property prices and for similar reasons. The end of the resources boom has left these markets in a poor state. Darwin has a huge oversupply of apartments and this will continue to affect the market in the short- to medium-term. The drop in demand and price for West Australia’s iron ore has had a major impact on the Perth property market. I can’t see the iron ore situation improving for a while so you can expect more pain.

Overall, 2015 was a positive year for most property owners. However, 2016 could be a different story. Keep an eye out for my next story on what we can expect in 2016.

– Peter “The Property Professor” Koulizos