In his column for Switzer, John McGrath discusses the first quarter results of 2017.  
So, the first quarter results are in and guess what?
Sydney is not – that’s right, not at the top of the leader board for price growth among our capital cities.
It’s exciting to see some other cities moving forward after such an extended period of Sydney and Melbourne dominance.
Over the March quarter, CoreLogic reports dwelling values (houses and apartments combined) grew by 5.6% in Hobart, 5.1% in Canberra and 5% in Sydney.
Melbourne wasn’t far behind at 4.2%.
Adelaide grew by 1.6%, Brisbane had no movement, and median prices fell in Darwin by -3.1% and Perth by -1.3%.

Sydney and Melbourne continue to grow strongly

Clearly, Sydney and Melbourne are both still growing strongly. 
Growth of 4-5% per quarter is very fast, and at that rate we’re on track for 15-20% growth over the year if things don’t slow down.
Right now, after a five-year boom, I would love to see some heat taken out of these two markets.
It’s important for the long term that prices have a chance to slow down and consolidate at their new levels.
However, with interest rates so low and a severe lack of stock intensifying buyer competition, it’s hard to see this happening any time soon.

The hand of APRA

APRA’s announcement that banks will have to limit interest only loans to 30% of all new residential lending might help reduce investor demand, as it is investors who typically want interest-only terms.
This measure, combined with government intervention on affordability, might help Sydney and Melbourne get back to normal market conditions.
We’re yet to find out what the NSW and Federal Governments have in mind to deal with affordability, but VIC has already announced a range of measures – among them the removal of incentives for investors to try and dampen demand from that particular group.

Other cities

Looking at the other cities, Canberra’s market turned in 2016 and continues to do well. 
Prices were up 9.3% in CY2016 and now they’re up a further 5.1% in the first quarter of 2017 alone.
Hobart is also on the rebound.
Prices went up by 11.2% in FY2016 and now they’re up a further 5.6%.
Conversely, Perth and Darwin have been doing it tough since the mining boom ended.
Median prices fell by -4.3% in Perth in FY2016 and Darwin prices rose by just 0.9%.
So far this year, prices have fallen slightly in both capitals.
Now, for Sydneysiders who have been keeping track of sales stories in the media, you would have seen many articles with screaming headlines about homes selling for up to a million dollars over reserve.
Every week, there are properties selling for astounding amounts – I’m talking $400,000, $500,000, $700,000 above reserve.

Obviously, this is fantastic for sellers but quite disheartening for buyers.

I would advise buyers in Sydney to be very wary right now. 
If you’re going to compete in this market, you need to understand that you’ll probably have to pay a premium.
If you’re buying for the long term, this might be less of a concern, but I do advise you to be very careful.
Figure out your budget and stick to it.
Better to be disappointed and walk away on auction day than endure the sleepless nights that come with a mortgage you can’t afford.