Where should I buy? Sydney, Melbourne are ripe picks

As a homeowner, it's feasible that the time will come when your existing property no longer suits your needs.

When you decide to refinance your mortgage to buy a new property, there's one factor that's certainly worth considering: capital growth.

You might be living in an area that currently boasts strong capital growth, which could be incredibly helpful in securing you a favourable sale price. Alternatively, your current area may not have strong capital growth, leading you to move on to an area that will provide the kind of growth you want in the long term.

Figures from the Australian Bureau of Statistics (ABS) released on May 13 highlight which cities are experiencing strong growth in residential property prices, which is certainly of interest to anyone with a home mortgage.

Sydney was number one, showing a 2.3 per cent increase in residential property prices between 2013's final quarter and this year's March quarter, according to the ABS' Residential Property Price Index (RPPI).

RPPI Director Robin Ashburn commented that Sydney house and attached dwelling annual price increases were the largest of all eight capital cities.

"For the weighted average of the eight capital cities, the RPPI rose 1.7 per cent in the March quarter 2014," Ms Ashburn explained.

"The index rose 10.9 per cent over the previous year, the largest annual increase since the June quarter 2010."

Melbourne was the second strongest city after Sydney, with a 2.1 per cent RPPI increase quarter-on-quarter to March. This figure is just 0.2 percentage points behind Sydney, making both the Victorian and New South Wales capitals good picks for your next property purchase.

The RPPI increased 1.1 per cent for Perth, 0.8 per cent for Brisbane, 0.7 per cent for Adelaide, 1.4 per cent  for Hobart and 1.1 per cent for Darwin, quarter on quarter, according to Ms Ashburn.

Canberra's index fell, with a figure of -0.1 per cent.

"The rise in prices has contributed to a rise in the total value of residential dwellings to $5.1 trillion in the March quarter 2014. The average value of Australia's 9.3 million residential dwellings was $546,500," Ms Ashburn added.

Image credit: Nikcname

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