Home value increases currently driven by middle-priced market

Home value increases currently driven by middle-priced market
Home value increases currently driven by middle-priced market

Mid-range suburbs across Australia’s capital cities are currently attracting the greatest increases in home values, while values across the affordable city suburbs and some of the most expensive suburbs have fallen.

Across the middle-priced capital city suburbs, 60% of these have recorded growth of 1.6% over the year to February 2013, whereas values have fallen by as much as -0.9% and -0.6% across affordable suburbs, and the most expensive suburbs respectively.

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The RP Data-Rismark Home Value Index results for March 2013 out last week confirmed that capital city home values increased by 1.3% over the month, 2.8% over the quarter, and 2.4% over the year.

Overall, home values have now increased by 4.7% since they reached their recent low. Based on available data to February 2013, home values increased in every capital city across the middle-priced suburbs over the 12 months excluding Adelaide where values fell by -0.7%.

It is important to remember that over the 12 months to March 2013, each capital city except Adelaide recorded an increase in home values; Adelaide home values fell by -0.5%.

On the other hand, the most affordable suburbs have recorded the weakest market conditions over the year in Melbourne, Brisbane and Adelaide whereas in Sydney and Perth, the most expensive suburbs have endured the weakest performance.

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At a combined capital city level in February 2013, home values were -6.4% lower than their peak in the most expensive suburbs, -3.4% across the most affordable suburbs and just -1.6% lower across the middle market.

The most expensive suburbs have been noticeably weaker across the more expensive capital cities of Sydney, Melbourne and Perth, with values -3.9%, -11.6% and -10.1% lower than their peak respectively.

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In Brisbane and Adelaide the most affordable suburbs experienced the weakest performance with values -16.3% and -10.0% lower than they were at their peak.

For the Sydney market, home values are now back above their previous peak which is highlighted by the fact that values across the most affordable and the middle-priced suburbs of the city have surpassed their previous peak.

Values across the most affordable Sydney suburbs are 2.8% higher than their previous peak, and the middle priced suburbs are 2.4% higher than they were at their previous peak.

Values across the major capitals remain below their historic highs and will need to see a significant recovery in order to return to the previous highs.

Cameron Kusher is senior research analyst at RP Data.

Cameron Kusher

Cameron Kusher

Cameron Kusher is senior research analyst at CoreLogic RP Data.

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