Selling season: vendors in front as prices rise this spring

Those thinking of selling their home can expect peak conditions this spring as home prices continue to climb and the number of properties up for sale remains low.

The positive outlook for sellers comes as home prices rose by 0.7 per cent in August, according to the Cotality Home Value Index.

That is the strongest month-on-month growth since May last year and translates to an annual change of 4.1 per cent.

"Once again we are seeing a clear mismatch between available supply and demonstrated demand placing upwards pressure on housing values", said Cotality Australia's research director, Tim Lawless.

Predicted further interest rate cuts this year, along with more generous first home buyer schemes, are also expected to contribute to favourable selling conditions.

"We'll probably see sprig being quite an active listings season, and buyers, of course, will follow suit," said Mr Lawless.

Across capital cities, there were price rises in every city, except for Hobart.

Brisbane saw the greatest price rise for the month with a 1.2 per cent rise in dwelling prices for the month, bringing the median home price to $949,583.

That makes the Queensland capital the second most expensive in the country.

Sydney remains the most expensive, with a median dwelling price of $1.224 million.

Melbourne home prices rose by 0.3 per cent; however, it lags as the sixth most expensive capital.

"I think the main theme across the market is a bit of momentum coming back into the growth rates, but it is definitely not shooting the lights out," Mr Lawless said.

Where prices are growing the most

It is the smaller capital cities, rather than Sydney and Melbourne, that are seeing the strongest growth in home values, according to the monthly report.

Along with Brisbane, home prices in Perth and Adelaide remained strong in August.

"The mid-size capitals still seem to be leading the growth trend, even though the pace of growth is much more uniform across the market," Mr Lawless said.

Regional Australia slips back

Another trend that continued through the last month of winter was that price growth in regional Australia remained behind capital city prices.

"This is the third month running where we've seen capitals showing a slightly stronger monthly growth than the combined regional market, which is a bit of a turning of the tables," Mr Lawless said.

Home prices across the combined capitals rose 0.8 per cent in August, while the combined regional home value jumped by 0.5 per cent.

However, Mr Lawless said the trend has occurred not because of a weakening in prices across regional Australia but rather due to capital city prices growing more strongly again.

And this growth could be linked to drops in interest rates this year.

"I think this probably reflects the fact that the capital cities might be in a better position to capitalise on lower interest rates and the improved level of demand that seems to be flowing into the market.

Active spring

A jump in activity in the property market this spring is being predicted after a more subdued winter.

The number of homes being put on the market to sell has fallen, and that bodes well for those looking to sell their properties.

"In the last week of August, the national total listing numbers were tracking about 20 per cent below the five-year average," he said.

"So I think for vendors or prospective vendors, it's really clear that selling conditions are very strong."

With fewer houses on the market, sellers "probably don't need to negotiate as much or discount their prices as much either".