Melbourne pulls ahead in the capital growth race

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The three months to the end of September were a mixed bag for Australian property markets according to figures released yesterday.

According to the September CoreLogic RP Data Hedonic Home Value Index, four Australian capital cities experienced an increase in their rate of capital growth over the period, while growth declined in four cities.

According to the figures, Melbourne’s growth accelerated the most during the period, with the median dwelling price increasing by 7.4% and outstripping Sydney’s 4.6%.

Median dwelling prices also rose in Brisbane (1.9%) and Darwin (0.4%) over the three months.

On the other end of the scale, Hobart was home to the biggest decrease over the period, with medians dropping by 2%, while in Adelaide prices declined by 1.6%.

Prices were down by 0.7% in Perth and 0.4% in Canberra.

The combined figures show capital city prices grew by 0.9% in the month of September and 4% over the three months.

Over the quarter the figures show little difference in capital growth between dwelling types; across the capital cities houses grew by 4%, while units grew by 3.9%

Source: CoreLogic RP Data.

CoreLogic RP Data research head Tim Lawless said the figures show buyers could soon be in the driver’s seat in Sydney.

“The slower month-on-month reading across the Sydney market comes at a time when auction clearance rates have slipped to the low 70% range from week-to-week and the number of advertised properties has risen,” Lawless said

“Vendors are still enjoying strong selling conditions, but it looks like buyers are slowly regaining some leverage in what has been a very hot market,” he said.

Lawless said the markets that saw price decreases in the three months to September’s end were facing a number of challenges.

“Weakening labour markets, slower population growth and less demand for housing is placing downwards pressure on prices to differing degrees across these markets,” he said.

While dwelling values continued to rise over the September quarter across the combined capitals rental rates slipped by 0.8% for houses and remained steady for units, resulting in lower gross rental yields.

Sydney, Melbourne and Canberra are all seeing gross rental yields at record low levels. 

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