There was a 0.5% rise in capital city dwelling values in June with Sydney, Melbourne and Hobart recording another substantial rise but five cities recorded falls.
Higher dwelling values across Australia’s two largest capital cities continued to push the CoreLogic Hedonic Home Value Index to new record highs, with dwelling values across the combined capital cities rising by 0.5% in June to be 8.3% higher over the past 12 months.
The June results continued to show a rebound in housing market conditions after CoreLogic reported weaker results for the final quarter of 2015 when the combined capitals’ index was down 1.4%.
However, the pace of capital gains in June was substantially lower than the April and May results when CoreLogic reported a 1.7%, and 1.6% month on month lift in capital city dwelling values.
‘The monthly growth rate reduction is likely to be very much welcomed by state and federal government policy makers and regulators who may be concerned about a sustained rebound in capital gains,’ said CoreLogic Asia Pacific research director Tim Lawless.
He pointed out that home values in Sydney have been rising for four years, and have increased by a cumulative 59% over this time frame. Melbourne dwelling values have been rising for the same length of time and have moved 41% higher over the growth cycle to date.
The combined capitals’ headline result was driven by a strong 1.2% rise in Sydney dwelling values, and a 0.8% gain across Melbourne’s housing market. Hobart values also showed strong conditions with dwelling values moving 1.8% higher over the month.
A breakdown of the figure shows that in Sydney prices increases 1.2% month on month, 6.8% quarter on quarter and 11.3% year on year to a median price of $780,000 while in Melbourne they increased by 0.8%, 3.5% and 11.5% to $587,500. In Hobart growth was 1.8%, 1.9% and 6.2% to a median price of $341,500.
In Brisbane prices fell 0.1% month on month but were still up 2.2% quarter on quarter and 5.3% year on year to a median price of $475,000 while in Adelaide they fell 1.3% month on month but were up 0.8% quarter on quarter and 2.2% year on year to $420,000.
In Perth prices have fallen across the board, down 0.8% month on month, down 3% quarter on quarter and down 4.7% year on year to $505,000 with a similar story in Darwin with a month on month fall of 1.6% a quarter on quarter fall of 2.5% and a year on year fall of 1.1% to a median price of $510,000.
Canberra is seeing prices fall for the first time in over a year. Values were down 1.1% month on month but still up 2.6% quarter on quarter and 3.9% year on year to a median price of $560,000.
‘While the higher rates of capital gains in Sydney and Melbourne can be tied back to strong economic conditions, and high rates of population growth, the same cannot be said for Hobart where economic conditions and migration rates are gradually improving from a low base,’ said Lawless.
‘The strength in the Hobart market comes after a long period of underperformance, where home values in the city increased by only 1.4% per annum over the past 10 years. Potentially, the Hobart housing market is being fuelled by the sheer affordability of housing and a renewed trend towards Melbourne and Sydney buyers unlocking their equity to make lifestyle housing purchases,’ he added.
Based on the CoreLogic Index results over the first six months of the year, capital city dwelling values have moved 5.5% higher during 2016, with the most substantial capital gains located in Sydney with growth of 8.9%, Hobart up 8.5% and Melbourne up 5.8%.
