Sydney's price growth gets even stronger in 2017 with opening 16 percent annual gain
Combined capital city dwelling values rose 0.7 percent for January with Sydney recording the highest annual capital gains with dwelling values up 16 percent over 12 months according to CoreLogic.
CoreLogic's Hedonic Home Value Index for January 2017 found since the growth cycle commenced in June 2012, Sydney dwelling values have increased by a cumulative 70.5 percent.
Tim Lawless, CoreLogic head of research said the largest month-on-month gains were recorded in Hobart (+1.4 percent), Sydney (+1.0 percent) and Melbourne (+0.8 percent).
"On a quarterly basis, the CoreLogic January index results confirmed that all capital cities recorded a rise in dwelling values, with Hobart in the lead, recording a 5.8 percent rise in dwelling values over the three months to the end of January. Sydney (+2.7 percent) and Melbourne (+2.4 percent) also posted strong increases over the rolling quarter," he said.
"The annual trend in dwelling value appreciation remained steady when compared with last month.
"The annual growth rate across the combined capital cities was 10.7 percent over the twelve months ending January 2017, compared with 10.8 percent over the previous rolling twelve month period.
“While the growth trend in smaller cities such as Hobart can show higher levels of volatility, clearly the Hobart housing market is now well into its growth cycle. Strong housing market conditions are being driven by positive affordability of housing, as well as improving economic conditions and stronger migration trends.”
"For Perth and Darwin, the rise in dwelling values over the rolling quarter may hint at a bottoming of the downturn, evident since 2014.
"Since dwelling values peaked in these markets they have reduced by a cumulative 7.7 percent in Perth and 7.5 percent in Darwin through to January 2017. Perth dwelling values were 2.1 percent higher over the past three months and Darwin values were up 1.8 percent.
“Buyers still have a great deal of leverage in these markets, with listing numbers remaining high, long selling times and high rates of discounting. However, in another indication that conditions may be moving through the bottom of the cycle, transaction volumes moved higher across both markets prior to the seasonal downturn in December and January, whilst the average selling time reduced from previously higher levels. With economic and demographic conditions remaining weak in these markets, a recovery in dwelling values is likely to be a slow process.”
"Gross rental yields slipped to a new record low across the combined capitals index in January, with the gross yield on a house now recorded at 3.20 percent, falling from 3.50 percent a year ago and 4.12 percent five years ago.
"The gross yield on a unit also reached a new record low in January, recorded at 4.01 percent across the combined capitals; down from 4.25 percent a year ago and 4.86 percent five years ago.
“While rental yields plumb new lows, investment in the housing market has been consistently ratcheting higher which implies that investors are speculating on further capital gains in the housing market."
