Latest stats show housing values rose across every capital city in January.

Australia’s housing value rebound continued into 2020 with the CoreLogic national home value index up by 0.9% over the first month of the year.

This now takes the annual growth rate to 4.1%; the fastest pace of growth for a twelve month period since December 2017.

Housing values rose in January across every capital city and rest-of-state region, apart from regional South Australia, where values held firm over the month.

This demonstrates a broader recovery trend which originally began in Sydney and Melbourne midway through 2019, and gradually spread to other areas of the country.

Across the capital cities, Sydney and Melbourne continued as the leaders for capital gains after recording more substantial declines during the recent downturn.

Values increased by 1.1% and 1.2% over the month respectively, while Hobart (+0.9%) achieved a higher growth rate relative to most other regions.

The remaining capital cities generally saw a mild rise in values over the month.

For Perth home owners, the latest results deliver positive news. Housing values are slowly emerging from a slump lasting five-and-a-half years, as dwelling values edged 0.1% higher over the month.

Perth dwelling values posted their first rise over a rolling quarter (+0.4%) since a brief period of growth in May 2018.

Darwin, where dwelling values have been consistently falling to be almost 32% below their 2014 peak, also recorded a subtle rise (+0.1%) in January.

Across the regional markets, the strongest conditions were recorded in regional Tasmania, where values were up 1.3% over the month, followed by regional Western Australia (+0.9%) then regional Victoria and regional Queensland, both up 0.8%

Highlights over the three months to January 2020

• Best performing capital city: Sydney +5.6%
• Weakest performing capital city: Darwin -1.6%
• Highest rental yield: Darwin 5.8%
• Lowest rental yields: Sydney 3.0%

Although there is an apparent recovery across every GCCSA (Greater Capital City Statistical Area) of Australia, the speed of growth has lost some momentum over recent months.

The national dwelling index slowed from a recent monthly peak of 1.7% in November, to 0.9% in January.

Seasonal effects provide some explanation for the slowdown.

The CoreLogic seasonally adjusted hedonic index implies the time of year shaves about 1 basis point of growth from the December reading and 2 basis points from the January reading.

Factoring in the seasonal affect, the latest results indicate a reduction in the speed of growth across most markets, especially for Sydney and Melbourne where affordability constraints are once again becoming more pressing.

As advertised stock levels rise over the early part of the year, we could some further dampening of growth rates.

Nationally, housing values recovered 6.7% since finding a floor in June last year, however CoreLogic’s national index remains 2.2% below the October 2017 peak.

With housing values rising at the quarterly pace of 3.7%, we are likely to see a nominal recovery in the national home value measure within the next two-to-three months.

 

The strongest gains continue to be recorded across properties in the upper quartile value range.

Across the combined capitals, the value of properties in the upper quartile rose by 1.2% in January compared with a 0.2% lift in value across the lower quartile.

On an annual basis, upper quartile property values are 8.5% higher while lower quartile property values are down 0.2%.

The trend towards a stronger performance across premium markets is most evident in Sydney and Melbourne, and to a lesser extent, Brisbane.

• Sydney’s top quartile market has recorded a 10.0% lift in dwelling values over the past twelve months compared with a 3.4% rise across the lower quartile.
• Similarly, Melbourne’s top quartile is up 11.5% in value over the past year compared with a 5.6% rise in lower quartile values.
• Brisbane’s upper quartile values are 1.3% higher over the year and lower quartile values are up 0.3%.

The stronger performance across the more expensive end of the market comes after a larger correction during the downturn, but also may reflect a rise in borrowing capacity following the changes from APRA in July last year, as well as the dominance of owner occupier buyers (rather than investors) through the recovery phase to date.

 

Thirty-four of the forty-six capital city SA4 sub-regions have recorded an annual rise in dwelling values over the twelve months ending January

The top performing sub-regions were once again confined to areas of Melbourne and Sydney.

The weakest conditions have generally been across Perth and Darwin, as well as Sydney’s Central Coast region and two sub-regions in Adelaide.

Melbourne’s Inner East, with a median dwelling value of $1.179 million, is leading the charge, with values up 16.2% over the year.

Despite the significant gains over the past year, values remain 2.9% below their August 2017 peak.

With such a rapid rate of growth, housing values in this area are likely to reach a new record high over the coming months

On a quarterly basis, the vast majority of capital city sub-regions have moved back into positive growth.

Only five of the capital city sub-regions have recorded a decline in home values over the past three months, comprising Darwin, Perth’s North West and South East, Mandurah and Brisbane’s Moreton Bay North.

Regional markets have recorded a relatively soft performance.

Broadly, regional housing values are up 0.4% over the twelve months ending January compared with a 5.2% rise across the combined capitals.

Across the forty-two non capital city sub-regions, twenty-five areas have recorded a rise in values over the past twelve months.

The best performing regional areas were mixed.

Areas of regional Tasmania, which remain extremely affordable for interstate buyers, dominated the top three positions with annual growth of more than 6%. Several coastal lifestyle markets and rural service centres also featured within the top ten best performing regional locations.

On a quarterly basis, thirty-eight of the non-capital city sub-regions recorded a rise in housing values, with only four regions recording a drop in values over the past three months.

The weakest regional housing markets continue to be located within the broader ‘outback’ regions of Queensland and across southern Western Australia, where housing demand remains low due to the persistent drought and weaker economic conditions.

 

Four of Australia’s eight capital cities are already showing home values at new record highs:

Brisbane, Adelaide, Hobart and Canberra.

Sydney values need to recover a further 5.4% before posting a full nominal recovery and Melbourne values need to see a further 1.2% lift.

Perth and Darwin will take a much longer time to see values recover.

Although the Perth market seems to be moving into a recovery, housing values remain 21.3% below their 2014 peak and Darwin values are 31.8% below their peak.

from Property UpdateProperty Update https://propertyupdate.com.au/latest-stats-show-housing-values-rose-across-every-capital-city-in-january/