Capital city dwelling values increase 2.9 percent over the September quarter: CoreLogic
Capital city dwelling values continued to show a strong headline rate of growth over the September quarter, with the CoreLogic Hedonic Home Value Index rising 2.9 percent over the past three months, according to CoreLogic’s latest market report.
The combined capital city index, which is heavily weighted towards the Sydney and Melbourne markets, recorded a 1.0 percent month-on-month gain, taking capital city dwelling values 41.3 percent higher since the growth cycle commenced in June 2012.
Growth conditions were substantially different from region-to-region. The top performing market was Melbourne where dwelling values pushed 5.0 percent higher over the third calendar quarter, due largely to a strong rise in house values (+5.2 percent) which balanced a softer result for the unit market (+2.9 percent). Canberra showed the second highest rate of growth over the quarter with values up 4.5 percent, followed by Sydney at 3.5 percent.
Highlights over the three months to September 2016
• Best performing capital city: Melbourne +5.0%
• Weakest performing capital city: Darwin -4.5%
• Highest rental yields: Hobart houses with gross rental yield of 5.2% and Hobart Units at 5.5%
• Lowest rental yields: Melbourne and Sydney houses with gross rental yield of 2.8% and Sydney units at 3.9%
• Most expensive city: Sydney with a median dwelling price of $785,000
• Most affordable city: Hobart with a median dwelling price of $325,000
In contrast, the weakest housing market over the quarter was Darwin where dwelling values declined by 4.5 percent, to be 11.1 percent lower than the most recent 2014 peak in property values and 13.9% lower than the previous 2010 peak in dwelling values.
Perth dwelling values also slipped 3.2 percent lower over the quarter to take the cumulative decline in values to 10.4 percent since their December 2014 peak, and 5.2 percent below the previous peak in 2010. Brisbane dwelling values also slipped lower over the quarter falling by a marginal 0.3 percent, attributable mostly to larger declines across the unit sector.
Darwin dwelling values are now roughly equivalent to what they were seven years ago, while in Perth, dwelling values have retraced back to 2007 levels.
The combined regional markets of Australia, where the measure of value growth lags by one month, saw house values slip 1.1 percent lower over the three months to the end of August.
While modest declines were recorded across most of the ‘rest of state’ housing markets, the weakest conditions continue to be experienced in regional Western Australia, where house values have fallen 12.4 percent over the past twelve months.
The weak housing market conditions across the regional areas of Western Australia were also highlighted in the recent CoreLogic Pain and Gain report, which showed one third of houses which resold over the June quarter did so at gross loss.
While the headline rate of growth remains positive across most cities, the majority of capital cities have seen their growth trend moderate compared with a year ago. The only capital city markets where the current quarterly rate of growth was higher (compared with the September 2015 quarter) was Hobart, Canberra and Adelaide.
The quarterly pace of capital gains in Sydney peaked over the June quarter of 2015 at 7.4% and, similarly, Melbourne’s quarterly rate of capital gain peaked at 7.9% over the same quarter.
Although value growth in Sydney and Melbourne is not as strong as it was at its peak, growth continues to be supported by high auction clearance rates which are now at their strongest levels since the June 2015 quarter.
In Sydney, clearance rates remained above 80% throughout September, while Melbourne clearance rates have consistently been above 75%, albeit on substantially lower volumes than a year ago.
The top three auction markets for spring activity have been: Inner Melbourne (780 auctions over the four weeks of September with a clearance rate of 75%), Melbourne’s Inner South (560 auctions with a clearance rate of 82%) and North Sydney/Hornsby (545 auctions with a clearance rate of 85%).
The most successful auction markets have been Sydney’s Eastern Suburbs where 89% of auctions were successful during September, Melbourne’s Mornington Peninsula (88% of auctions cleared) and Sydney’s Ryde (87% of auctions cleared).