Nine Brisbane suburbs to become property hotspots: Place Advisory

Currently, more than $47 billion worth of infrastructure projects are planned for Brisbane city, with suburbs emerging as those to benefit most from the spend, according to Place Advisory.

Director of Place Advisory, Lachlan Walker, said that while all areas of Brisbane will see themselves doing well from the improved infrastructure, there will be some potential hotspots.

“The current infrastructure pipeline has more than $47 billion worth of major projects in various stages, all of which will further enhance the attractiveness of the city, drawing in both owner occupiers and investors,” Walker said.

“But while we know Brisbane as a whole will benefit, we can certainly pinpoint some particular suburbs that will benefit more than others from infrastructure planned or underway, and by benefit we mean see a marked increase in demand to live there, resulting in greater price and rental growth.”

He pointed to the following suburbs and the infrastructure they will benefit from:

Brisbane City

Underground Bus Loop: Currently in concept stage. To connect at George Street, Queen Street, Albert Street and Adelaide Street in the CBD to reduce confestion and travel times.

“Since it only runs through the city, the Underground Bus Loop will benefit residential properties located in the CBD itself, as well as neighbouring Spring Hill,” said Walker.

Spring Hill

Underground Bus Loop

Woolloongabba

BaT Tunnel: Currently in concept stage. This will be a 5.4 kilometre proposed north-south tunnel to bring trains from Dutton Park to Spring Hill. Walker expects that the journey will be shortened in this area from the southern suburbs to the inner north suburbs, helping reduce the requirement to travel through CBD conhestion.

“It will be built to accommodate the additional 130,000 workers expected for the CBD and adjacent suburbs over the next 20 years, and will fulfil the need for public transport services for the next 50 years,” he said.

Dutton Park

BaT Tunnel

Toowong

Legacy Way: A tunnel set to connect the Western Freeway at Toowong with the Inner City Bypass at Kelvin Grove. It will minimise congestion and allow easier access to the airport, and will cut out the use of major roads.

“Upon completion Legacy Way will almost halve peak travel times between the Western Freeway and the ICB,” he said.
Indooroopilly Shopping Centre Redevelopment : Expected to come to a completion soon. Involves expansion and renovation of existing shopping centre and an adjoining new plaza at the junction of Station and Stamfords Roads.

“With the redevelopment aiming to bring a quality of shopping that’s currently lacking in the western suburbs, it will benefit the entire area, including Indooroopilly itself, as well as Toowong, St Lucia, Taringa, Graceville, Chelmer, Sherwood, Fig Tree Pocket, Jindalee and Kenmore,” said Walker.

St Lucia

Legacy Way

Indooroopilly Shopping Centre Redevelopment

Indooroopilly

Legacy Way

Indooroopilly Shopping Centre Redevelopment

Hamilton

Kingsford Smith Drive Upgrade: In concept phase. Running off Kingsford Smith Drive, it will reduce congestion and benefit local residents.

Brisbane Airport New Parallel Runway: Currently under construction. Looks to support the needed flights in and out of Brisbane, which may result in increased demand for property with access to the airport.

“Consequently we believe suburbs such as Hamilton and Nundah will see a boost in popularity from the construction of the new parallel runway. They’re in close proximity to the airport and easy to get to and from for travellers,” said Walker.

Nundah

Brisbane Airport New Parallel Runway

Other suburbs that may benefit: Taringa (from Indooroopilly Shopping Centre Redevelopment) and Mt Coot-tha (both benefiting from Legacy Way), and Graceville, Chelmer, Sherwood, Figtree Pocket, Jindalee and Kenmore (from Indooroopilly Shopping Centre Redevelopment).

Despite these benefits for the area, Walker said that the best time to buy is as soon as the infrastructure project is announced.

“However, once the benefits of the project flow through to the area there will only be increased demand from buyers and renters, and this means prices and rents will continue to grow, or at the very least be stable.”

Mackay rentals tighten

“IT’S better than it was and we’ve probably reached the bottom but it’ll be a long road to recovery.”

That’s the blunt assessment of the state of real estate in the resources hub of Mackay by REIQ zone chair Peter McFarlane.

At the end of last year rental vacancy rates were the highest on record, sitting at 7.7 per cent.

In a small piece of good news, that has now dropped to 7.5 per cent in the March quarter.

“I have been in real estate for 30 years and the vacancy rate was the highest I’ve ever seen,” Mr McFarlane told Shift Miner.

“There has certainly been some improvement, and since the beginning of the year our office has seen a change in the amount of serious rental inquiry.”

Mr McFarlane said there was always going to be a correction in the market, but many had not expected it to be so sudden or marked.

“People can’t seem to remember Mackay before the boom for some reason. We continually told our landlords while rents were going up by $50 every six months, this is a purple patch and there will be an adjustment down the track.

“But we thought rents would just stabilise and stay there for a few years.”

Instead, Mackay was identified as an investment hot spot and southern developers and builders descended on the Northern Beaches area, opening up new subdivisions for out-of-town investors.

“Overall, 35 per cent of Mackay’s total number of dwelling are rentals but in these new developments in Blacks Beach and Bucasia it is more like 80 per cent,” explained Mr McFarlane.

“The promises these developers are making to investors are not coming to fruition and people have started to learn they are not going to get $600 rent a week – more like $400.”

Mr McFarlane expected that in the next 12 to 18 months investors would sell off their properties, and they would be bought by local owner-occupiers, helping to stabilise the market and bring down rental vacancy rates.

However, he said the downturn in the mining sector meant job security was now a big issue for first home buyers who might be interested in the area.

“A lot of people who have been put off by mining supply businesses were casual employees so they left with no big payout; they were just cast aside with no financial back up,” he said.

“We are living in a much more mobile society so people can just pack their bags and leave town.”

Nonetheless, Mr McFarlane was hopeful vacancy rates on rentals would drop back to around 5 per cent by the end of the year.

BHP bullish on iron ore production

BHP Billiton has increased full year iron ore guidance by 5 million tonnes, in a move that will surpass even the most optimistic expectations that were held by analysts.

The miner said today that production of its biggest money-spinner would now reach 217 million tonnes in the 2014 financial year rather than 212 million tonnes.

It is the second time this year that BHP has improved its iron ore production guidance and it came as full year coking coal guidance was also raised.

BHP said the lift in iron ore expectations was enabled by a March quarter that saw a “relatively limited impact” from wet weather and cyclones.

That comment was a surprise after Rio Tinto’s iron ore production from the same region was weaker than expected on the back of weather delays.

BHP produced 49.5 million tonnes of iron ore from the Pilbara in the March quarter, slightly better than analysts had expected.

The company enjoyed the benefits of a ramp-up in production from its Jimblebar mine, and its continued focus on incremental gains through efficiency and debottlenecking.

Baillieu Holst analyst Adrian Prendergast said the increased production guidance was a ”great result for a division that represents roughly half of company earnings”.

The iron ore price rose slightly overnight from $US117 per tonne to $US117.10 per tonne.

BHP’s Queensland coking coal mines might be operating in a tough, low commodity price environment, but that hasn’t prevented an increase in production guidance there either.

Guidance had previously been set at 41 million tonnes for the 2014 financial year, but that was a cautious target designed to allow for interruptions during the March quarter, when mines are often affected by wet weather and cyclones.

Having now come through that period largely unscathed, BHP’s leadership felt comfortable increasing full year production guidance to 43.5 million tonnes.

The major negative from the quarterly results was a 2 per cent reduction in petroleum guidance on the back of weaker than expected production from BHP’s US shale assets.

The Hawkville area in the Eagle Ford was specifically named for poorer than expected recoveries.

Full year guidance for copper was maintained at 1.7 million tonnes despite improved performance at Escondida in Chile.

Results were mixed across the division, and both Antamina and Olympic Dam will produce at below optimum levels in the remaining three months of the financial year.

But the miner announced that the official mineral resource at Escondida – which is already the world’s biggest copper mine – has increased by 28 per cent on the back of brownfield drilling.

BHP considers its business to be built on four pillars; iron ore, coal, copper and petroleum, but the company is considering a possible fifth pillar in the shape of the Jansen potash mine in Canada.

But the miner demonstrated it was in no hurry to develop that fifth pillar, having proceeded much slower than expected on development of Jansen thus far.

BHP now expects to spend $US600 million on development of Jansen in the 2014 financial year, rather than the $US800 million that was originally forecast.

“We will continue to modulate the pace of development as we seek to time our entrance to meet market demand,” the company said in a statement, adding that it expects the mine to properly ramp-up after 2020.

There was little further guidance from BHP with regard to the company’s divestment campaign.

Fairfax Media reported earlier this month that a demerger of non-core assets was looming as the main option for BHP to divest of divisions like nickel, aluminium and possibly manganese among other assets.

BHP said further production capacity would be curtailed from its struggling aluminium division, particularly at Alumar in Brazil. The Bayside smelter in South Africa is also likely to close in the near future.

Mr Prendergast said there were few highlights from those non-core divisions in today’s production report.

”BHP’s alumina, aluminium, manganese ore and alloys, and nickel production were all down on the previous quarter in terms of production and mostly down year-on-year,” he said.

BHP shares last traded at $37.78, and Mr Prendergast said the stock was “not expensive” at that price.

The release of March quarterly reports continues on Thursday with Evolution Mining and Sandfire Resources due to report.

Airport to push western Sydney values sky-high

Property values in Sydney’s west are expected to take off with the announcement of a second airport at Badgery’s Creek earlier this week.

Principal of Raine&Horne Liverpool Vince Labbozzetta predicted property values would grow by five to 10 per cent per annum between now and 2016, when building is slated to commence.

“It’s been a long time coming and this announcement is set to jet-propel the Liverpool economy and create plenty of jobs in construction and ancillary industries,” he said.

In addition, he predicted the project would put further pressure on the local rental market.

“We already have low rental vacancy rates in Liverpool. This announcement will squeeze vacancies further and push up rents by up to $50 to $100 a week as more construction workers move to the region,” he said.

However, Douglas Driscoll, CEO at Starr Partners, told Smart Property Investment’s sister publication, Real Estate Business, the building of the proposed new airport was “bittersweet” for the western market.

“There are not many places, anywhere in the country, growing as fast as the south west corridor of Sydney, and clearly demand for property will increase due to more jobs coming to the area, but the noise pollution the airport will produce is also a big consideration,” Mr Driscoll said.

“There is already an over-demand for property in the surrounding area.”

According to Lachlan Walker from Place Advisory, major infrastructure projects can result in “overnight” growth in surrounding suburbs.

He points to the construction of the Airport Link in Brisbane’s north as an example of this phenomenon.

“Some of those northern suburbs experienced an overnight price growth once the tunnel was completed,” he said.

“There was a bit of depression in the market during construction, but once completed there was an immediate rise.”

Mr Walker added that when you combine long-term capital growth, population growth, infrastructure investment and employment opportunities in an area, you tend to see high demand.

“As soon as you get high demand, you get price growth,” he said.

Sydney’s new airport at Badgerys Creek will be a double-edged sword for investors

Already the questions are streaming in: how will the new Sydney airport impact on property markets?

Will Badgerys Creek make Penrith become a boom town? Will Liverpool surge? Where should I buy to benefit?

Many issues are evident here. One is that investors are constantly trawling for opportunities and for events that will be game-changers. Some are looking for shortcuts to wealth and see an announcement like Badgerys Creek as the door to a rapid windfall, if they can zero in on the best places to invest.

Another issue is about risk in real estate. And another addresses the elements that generate out-performance in real estate investment.

Let’s take the last issue first. There’s no doubt infrastructure is the biggest creator of real estate wealth. New infrastructure is the ultimate game-changer.

And the most influential is transport infrastructure.

I suspect more people will waste money buying in haste than make money by getting it right.

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Hotspotting research shows that suburbs with commuter train stations have higher capital growth rates than those without. A new motorway or bridge can revolutionise the appeal of a location by making it more accessible. The intersection of two motorways is a magnet to warehousing and logistics real estate – and other forms of property spin off it, including residential.

The thing about a major new international airport is that it’s a double-edged sword, it can create problems as well as opportunities. Property under the flight path may suffer while others will benefit from the economy generated by the facility.

It’s similar with a commuter train station: the ideal is to be within walking distance but not so close as to suffer from the noise and the traffic.

The most direct real estate beneficiaries of a new airport are outside the residential sphere. A new airport creates, firstly, demand for hotels and secondly, for warehousing and other light industrial property.

Residential is an indirect beneficiary because an international airport creates a new economy with tens of thousands of jobs, and people like to live close to their work.

But perhaps the core issue is risk. When a project like Badgerys Creek is announced, lots of people dash about looking for ways to make a killing from buying strategic real estate. But the airport may never happen. This is the ultimate political football and there will much upheaval along the road to construction. Plans for a second Sydney airport have been talked about for close to 50 years. The Prime Minister’s announcement does not make this a certainty.

If it does happen, Badgerys Creek won’t be reality for maybe 10 years – although the Prime Minister hopes construction will start in 2016. But before that can happen, big issues need to be sorted, including funding, road and rail links, project partners and the issues of noise and flight paths.

Long-term, the impact of a new airport at Badgerys Creek would be enormous. Short-term, many investors will expend considerable energy trying to find out how best to turn the federal government’s decision into a personal windfall.

Many will feel they need to act urgently or they’ll miss a major opportunity. My advice is to take a cold shower, settle down and watch what happens.

I suspect more people will waste money buying in haste than make money by getting it right.

Sign the petition to fight the FIFO scourge

THE battleground is almost 1000km away, but Toowoomba councillor Chris Tait is preparing his war paint.

The solicitor-turned-politician is watching the fight between Central Queensland’s mining community and the State Government, all while keeping an eye on what it means for his region.

BHP Billiton Mitsubishi Alliance won State Government permission to hire all 1000 staff for its Caval Ridge and Daunia coal mines from out-of-town, not from the nearby town of Moranbah.

According to both BMA and Deputy Premier Jeff Seeney this allows mining wealth to be more evenly distributed across the state.

It also gives the opportunity for those who live in areas with high unemployment to enjoy the benefits of mining wages, according to Mr Seeney.

> SIGN THE PETITION HERE <

The Warwick Daily News is campaigning against allowing companies and the State Government to exclude all local workers from even applying for these roles.

Moranbah businessman Peter Finlay has launched a formal petition against the government policy, which he believes has had a “massive effect” on the community.

Cr Tait said he and Mr Finlay would be on the same page, particularly with the proposed gas development in Toowoomba’s surrounding areas.

“If companies are taking resources out, they should be prepared to make some commitment to communities they operate in,” he said.

He said while Western Downs communities like Miles or Chinchilla would cop the worst of such a policy, there would be “some effect” on Toowoomba.

“If it is complete fly-in, fly-out, there is no community,” Cr Tait said.

“You need people in the town to participate in school, to support doctors so there is a viable medical facility.

“We cannot concentrate all of this on the coast, it has to be in communities where the coal is, where the gas is.”

Local workers leave home towns to become employed by mines

OUR regions are having the life sucked out of them and it needs to stop.

In the past two years, jobs have disappeared from the resources industry and our regional towns are growing desperate.

In the face of these shrinking prospects, the State Government has allowed workers from Brisbane and Cairns to take all 1000 jobs at two major coal mines in Central Queensland.

The Daily Mercury intends to do something about it and needs your help to get things changed.

The residents of nearby towns, including Moranbah and Dysart, were told not to bother applying to work at the Daunia and Caval Ridge mines.

By refusing opportunities to these communities, local workers have no choice but to leave their home towns if they want work.

Deputy Premier Jeff Seeney supports the use of a 100% fly-in, fly-out workforce.

He praised its benefits when recruiting by BHP Billiton Mitsubishi Alliance began early last year.

The FIFO precedent was set in Moranbah, but as regional mayor Anne Baker said: “Everyone should be watching”.

If it becomes standard practice, it could cause the outsourcing of thousands of jobs from gas fields surrounding Toowoomba and the Surat Basin.

If untold billions are spent building proposed mines in the Galilee Basin west of Gladstone and Rockhampton – and expanding Abbot Point coal terminal near Bowen – we don’t want 100% of the wages being flown back to Brisbane.

Our corner stores, bakeries, car dealers and supermarkets would struggle while the cities prosper.

Some workers may need to be sourced from out of town or overseas, but it should never be all of them.

The fight against 100% fly-in, fly-out workers has already begun in Moranbah with Mayor Baker, but it cannot be fought alone.

Mr Seeney said the use of FIFO is decided by Co-ordinator-General Barry Broe, not politicians.

That may be so, but politicians in power can make laws and policy to ensure our people are given an opportunity to work.

The Daily Mercury is calling on the government to change its stance on the 100% fly in, fly out plans, ensuring our regions have a chance to grow as communities, not just as holes in the ground.

In coming days and weeks we are going to highlight these issues to you. If you have a view on this, or a story idea on this issue, tell us about it.

Highest leap for iron ore since August

Iron ore’s largest one-day gain in nine months has pushed the bulk commodity back to levels seen before March’s “flash crash”.

Improving emerging market sentiment and increased hopes of stimulus in China saw iron ore lift 4 per cent overnight The benchmark iron ore price, a measure from the port of Tianjin in China, has risen 5.7 per cent in the last week, now sitting at $US116.90 ($126.22).

Iron ore, emerging markets and riskier assets, in general, have had a strong run in the last week, Deltec chief investment officer Atul Lele said.

The MSCI Emerging Markets Index has jumped 4.2 per cent in the last week.

Cheap valuations in emerging markets, hopes of stimulus in China and hopes of further liquidity injections globally, are all supporting iron ore and riskier assets, Mr Lele said.

The recovery in iron ore comes after a “flash crash” three weeks ago, which saw the metal plummet more than 8percentinone day. The fall was attributed to financial arrangements which used iron ore as collateral being unwound. However, analysts said investors should not expect a return to levels above $US130 per tonne.

“At present, none of the indicators suggest that we’re going to see a strong resurgence in the iron ore price. But that’s not withstanding any stimulus that comes through from China aimed at fixed asset investment” Mr Lelesaid.

Expectation of increased investment in infrastructure from the Chinese government to prevent the economy from slowing were reflected in the jump in iron ore and steel prices.

China rebar steel futures gained 1.1 per cent overnight and have added 3.7 per cent in the last week.

Liquidity concerns over commoditybased finance deals in China have eased and iron ore is returning to fundamentals, CLSA analyst Andrew Driscoll said. “Most important over the last couple of weeks, and there was a data point yesterday, steel inventory at the mills has been ticking down,” Mr Driscoll.

“The mills are selling steel into the market and the steel price is holding up OK,

suggesting that the demand is there for the steel.” On top of the hopes of stimulus, expected seasonal upturn in steel consumption was helping the iron ore price, ANZ head of commodity research Mark Pervan said.

“The gains were despite a further rise in port inventories last week; however,

the 38 kilo tonne build last week was the smallest in several weeks,” he said.

“Talking to the industry in the last couple of weeks, these guys are now thinking we’ve probably hit the bottom of the iron ore market and are looking to reposition. However, they’re probably waiting for slightly better seasonal demand to kick in.” Any increase in iron ore prices will need to be backed up by a jump in steel consumption. Infrastructure and property are the biggest consumers of steel in China, accounting for around 67 per cent of consumption.

China boosts growth with infrastructure

Shanghai | China’s government has approved a raft of infrastructure projects, including five new rail lines, and outlined plans to spend more on irrigation, agriculture and social housing as two new manufacturing surveys confirmed the economy’s slow start to the year.

Economists have cautioned investors not to expect a big-bang stimulus package like the one rolled out in response to the global financial crisis. However, there is increasing evidence the government has started to boost public spending in an effort to keep growth at its target level of “about 7.5 per cent”.

The state-owned China Securities Journal ran a story on its front page on Tuesday outlining the measures the government was likely to take to boost growth, emphasising this was “fine-tuning” rather than a big stimulus.The newspaper said the measures would include more spending on affordable housing, agriculture, irrigation, rail projects and environmental protection.

The National Development Reform Commission recently approved two coal mining projects in InnerMongolia as well as five rail lines. One analyst said some of those rail projects had been slated for next year but were brought forward. All up, the spending would be more than 150 billionyuan($26.5bil]ion).Officials from the NDRC, China’s top economic planning agency, also said there would be more spending on agriculture infrastructure projects at a press conference last week.

This year they expect to spend 70 billion yuan on the projects, which are mainly focused on irrigation.

Meanwhile, Premier Li Keqiang said over the weekend the government was committed to its policy of transforming shanty towns into social housing with projects to build more than three million new homes already underway.

It is unclear how much of this money is additional spending or part of China’s normal budget allocations. “There has been a little bit of stimulus activity on the quiet” said Macquarie’s Shanghai-based commodities analyst Graeme Train.

“But we think some in the market are getting too hopeful for a big stimulus.” The government has been under pressure to step in and rev up the economy following a run of weak economic releases. Exports, domestic spending, activity in the property sector and industrial production have all been lower than expected.

A government survey released on Tuesday showed that business activity across the manufacturing sector picked up only slightly in March, which is typically a strong month for factories as they ramp up production after the Chinese New Year holiday at the start of the year.

The official Purchasing Managers’ Index (PMI) rose to 50.3 from 50.2 in February, a smaller increase than in previous years.

The HSBC/Markit PMI, which surveys smaller firms in the private sector, painted an even bleaker picture, showing business conditions at their worst in eight months, as firms shed jobs and new orders fell. The official PMI gives a broader view of the manufacturing sector as it includes the big state-owned firms.

Westpac economist Huw McKay said in a note “the combined surveys make for unhappy reading”. The manufacturing sector “is experiencing a pronounced soft patch that has some months to run”.

Still, the small bump in the official PMI suggests that economic activity may be stabilising and that international demand is picking up. “While conditions in the sector remain subdued, they haven’t deteriorated as fast as some have feared,” said Capital Economics China economist Julian Evans-Pritchard He said that was supported by preliminary data on electricity output, which according to the NDRC – grew by 8.5 percent year-on-year during the first 24 days of last month, up from growth of 5.5 per cent in February. “Meanwhile, domestic weakness has been partly offset by healthy foreign demand,” he said.

Kcv points Government has been under pressure to step in and help the economy.

Measures include irrigation, rail projects, affordable housing and agriculture.

Rate rise risk from house prices

Real estate Question over sustainability of capital gains growth but it’s unlikely to slow until supply increases

The Reserve Bank of Australia may be forced to raise interest rates sooner than predicted if house prices continue rising, after first-quarter figures showed big capital gains across most capital cities.

House prices rose anew in March, gaining 2.3 per cent across the capital cities, RP Data-Rismark figures showed. RP Data research director Tim Lawless said the growth rate was unsustainable.

“If the pace of capital gains doesn’t slow, we may see higher interest rates realised much earlier than previously expected,” he said.

Economists have foreshadowed a rate rise for the fourth quarter 2014 and possibly in the 2015 first quarter.

Dwelling values were up across the capitals in the month of March and for the first quarter, particularly in Melbourne and Sydney. Brisbane and Adelaide also gained traction, prices rose 2.9 per cent and 1.4 per cent respectively for the month.

After recording solid gains off the back of the mining boom, Perth prices have stalled. A 0.6 per cent decline was recorded over the March quarter which reinforced commentator predictions that prices there will fall as the boom slows.

March is traditionally strong for home sales and Rismark managing director Ben Skilbeck said seasonality influenced last month’s result after a subdued February.

After a 2.8 per cent price rise in March, Sydney’s median house price was $713,000, followed by Darwin at $575,000 and Melbourne at $555,000.

Sydney’s median unit price was $552,500.

After little growth in the past decade, Sydney prices and turnover have

spiked, starting at the more affordable investor end of the market and flowing through to prestige sales. Vendors in blue-ribbon suburbs such as Mosman were confident of a good price so were confident to sell and upgrade, said Belle Property agent Adrian Bridges.

Mosman homeowner Michelle Sutton listed her five-bedroom with $5 mil

lion-plus hopes. It is the fourth home Ms Sutton has renovated to sell on and her home’s April auction has been timed to take advantage of the thriving market. “We’ve been in Mosman 14 years and this is the strongest I’ve seen it,” she said.

T m looking for the next project and have noticed there is a lot more interest in older homes and deceased estates, they’re selling for more than I’d expect” In Perth, the only capital city to record a drop over the quarter, agent Craig Kelson of Kelson Real Estate said the market had “plateaued” but was not sluggish.

“Mid last year, if you were opening a house for the third weekend you were wondering why is this happening,” Mr Kelson said. “They haven’t lost anything in terms of price, but they are now likely to stay open longer.” Ray White chairman Brian White said the resource-rich areas may have come off their peak but transaction numbers were still strong and he was confident homes would hold their value. Mr White said Ray White had broken its monthly record for unconditional contracts exchanged in one month, $3.1 billion set in 2006.

“We still have some results to come but we’ve already gone over $3.1 billion, we won’t another month like March again until around October,” he said.

While much of the capital gains buzz has been around Sydney, Mr White said Melbourne prices continued their upwards trajectory, with little correction since the 2009-10 peaks.

“Our Glen Waverly branch sold more than $50 million worth of property last month. It is one of the strongest performers in the country – conditions are positive in Victoria but the constant price growth does have us scratching our heads,” Mr White said.

Mr Lawless said prices were likely to cool later this year and he did not believe the strong pace of growth could be sustained.

CBA analyst Gareth Aird said house prices would keep growing until supply increased. He thought the rise in building approvals recorded throughout the past six months may cause a slowdown.