CoreLogic`s national housing market index showed a remarkable reversal in housing market conditions over the past year.
A year ago, national dwelling values were up 10.2%, largely driven by surging values in Sydney where the market was up 16% and Melbourne where values had tracked 13% higher over the year.
The most recent financial year has seen the national index slide 0.8% lower, with Sydney values down 4.5% and Melbourne values edging only 1% higher.
Although most of the focus has been on slowing conditions in Sydney and Melbourne over the past year, every capital city apart from Perth has shown a weaker performance over the most recent financial year relative to 2016-17, although there are some variances across the product types and valuation segments.
Across the broad product types, the detached housing sector has underperformed relative to the unit market, with capital city house values down 2.2.% over the financial year while values managed to eke out growth of 0.4%.
This stroner performance from the unit sector was heavily influenced by the Sydney and Melbourne housing markets where the unit sector has been more resilient to a downturn, likely to due to the more affordable price points avaliable within the unit market and the surge in first home buyers where demand is focused on more affordable housing stock.
Every other capital city, where housing affordability constraints are less challenging, has seen the detached housing sector outperform the apartment market.
We have also seen some divergence in housing market conditions across the broad valuation segments.
The combined capital cities index is showing clear weakness at the most expensive end of the market, with the most expensive quarter of housing recording a 3.6% fall in dwelling values over the year while the most affordable quarter of properties have seen values rise by 1.4%.
Once again, this headline trend is heavily influenced by Sydney and Melbourne, where the most expensive quarter of the market has seen values fall by 7.4% and 2.5% over the financial year respectively.
Most other cities have seen relatively little difference in the performance of properties across the broad valuation spectrums.
Another sign of diverging performance can be seen in advertised stock levels.
The number of properties advertised for sale in June 2018 was 22% higher than a year ago in Sydney and 10% higher in Melbourne while every other capital city has seen a reduction in overall advertised stock levels.
A rise in inventory levels implies buyers have more choice, more ability to negotiate with vendors and less urgency in their decision making which helps to alleviate any upwards pressure on prices.
Demonstrating the impact of low advertised stock levels, the strongest capital city housing market, Hobart has almost 30% fewer homes currently on the market compared with a year ago.
The change in housing market conditions can also be seen across CoreLogic vendor metrics, including auction clearance rates, median selling time and vendor discounting rates.
Across the combined capitals, auction clearance rates have reduced from 67% at the end of the previous financial year to finish 2017-18 about ten basis points lower, at 55%.
The two largest auction markets Melbourne and Sydney, have seen clearance rates reduce from 71% to 60% and from 68% to 50% over the year.
Median selling time has increased by 3 days over the year across the combined capitals to reach 43 days.
The Sydney housing market has recorded the largest increase, with the median selling time increasing by 20 days over the year to reach a median of 46 days.
Conversely, homes in Hobart are typically selling 20 days quicker, averaging just 29 days based on the most recent data.
As always, there are substantial differences in the housing markets performance across each of the capital cities.
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from Property UpdateProperty Update https://propertyupdate.com.au/national-housing-market-update-video-july-2018/