Housing prices complete seasonal down-up

After four weekly rises, housing prices have recovered the ground lost in the usual early-winter dip.

The average auction price of homes in mainland state capitals rose by 0.9 per cent in the week ending Sunday, according to property market analysis firm RP Data.

That brought the total gain after four consecutive weekly rises to 2.4 per cent and the year-to-date rise to 4.1 per cent, completely erasing the early-winter dip.

This time last year, the equivalent numbers were at a four-week gain of 2.6 per cent and a year-to-date rise of 3.5 per cent.

So the pattern so far this year is much the same as last year's, which was the prelude to a gain of 10 per cent for the full year.

The fine details are not the same, though.

This time last year, Perth was sitting of a year-to-date gain of 4.9 per cent, but right now prices there are only 0.1 per cent higher than at the end of 2013.

In contrast, Sydney's year-to-date gains has been faster, at 6.3 per cent versus 5.3 per cent, Melbourne's latest 4.5 per cent is beating last year's 3.2 per cent, and Brisbane and the Gold coast are up 2.8 per cent so far this year compared with 0.9 per cent at the same point last year.

Adelaide has remained weak, up by 0.1 per cent so far this year compared with 0.5 per cent over the same part of 2013.

The big test will come over the next few months, as increasing numbers of homes are put under the hammer in the spring and early summer.

It's possible that the negative sentiment showing up in consumer surveys since the budget in May flows through into investment decisions.

And there is a time limit to price rises at the pace of last year - eventually the combinations of rents and expected capital gains that might justify purchases prices will become simply implausible.

And, as RBA governor Glenn Steven said in a widely-reported speech last week, home-buyers should should not assume that prices always rise.

"They don't; sometimes they fall," he said.

And it was not the first time he's pointed this out.

The market could be derailed at any time by any number of things - a renewed financial crisis, political turmoil or speculation about interest rate rises, for example.

But the big picture suggests that the market is currently on track a repeat of last year's solid annual gain.