Melbourne makes move on Sydney's top price growth mantle: CoreLogic

Melbourne makes move on Sydney's top price growth mantle: CoreLogic
Melbourne makes move on Sydney's top price growth mantle: CoreLogic

Dwelling value growth was flat in Sydney over April with Melbourne values up 0.5 percent over the month according to CoreLogic's Hedonic Home Value Index for April

Tim Lawless, head of CoreLogic research said the moderation in growth was due largely to a slightly negative April result in Australia’s largest capital city housing market, Sydney, where dwelling values were broadly flat (rounded up from - 0.04 percent) over the month. 

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Melbourne makes move on Sydney's top price growth mantle: CoreLogic

"The result for Melbourne was also lower than previous months of 2017, with dwelling values up 0.5 percent over the month,” he said.

"Dwelling values increased by 0.1 percent across the combined capital cities in April, with housing market conditions slowing in both Sydney and Melbourne.

"The softer results across Australia’s two largest capital cities comes after dramatic capital gains were recorded over the second half of 2016 and the first three months of 2017.

"Between July 2016 and the end of March 2017, Sydney dwelling values surged 11.3 percent, whilst Melbourne values increased slightly more at 12.6 percent in the same period.

"The April results mark the weakest monthly change in dwelling values across the Sydney market since December 2015, when CoreLogic reported a 1.2 percent fall in Sydney dwelling values; the soft reading comes after dwelling values have risen by 75.1 percent over the past five years, an annual rate of growth of 15 percent over this period.

"Most other capital cities also recorded softer growth conditions in April than for the first three months of 2017.

The trends generally remain positive, with quarterly growth of 2.9 percent across the combined capitals index.

"Based on the rolling quarterly change in dwelling values, the strongest housing market is currently in Hobart, where home values have risen 5.1 percent over the past three months.

"Hobart’s housing market has staged a solid improvement over the past two years and is now the third best performing capital city on an annual basis, with dwelling values moving almost 14 percent higher over the past twelve months alone.

“We need to be cautious in calling a peak in the market after only one month of soft results.

“April, in particular, coincides with seasonal factors including Easter, school holidays and ANZAC day long weekend.

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Melbourne makes move on Sydney's top price growth mantle: CoreLogic

"The softer results should also be viewed against a backdrop of an ever evolving regulatory landscape s which is firmly aimed at slowing investment and interest-only mortgage lending. Testament to this is mortgage rates which have been edging higher, particularly for investors and interest-only loans, as well as rental yields which have been hovering around record lows. The higher cost of debt, as well as stricter lending and servicing criteria, has likely dented investment demand over recent months.

“In a city like Sydney, where more than 50 percent of new mortgage demand has been from investors, a tighter lending environment for investment purposes has the potential to impact housing demand more than other cities."

 

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Price Growth Dwelling Values

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