August was a mixed month for residential property prices in Australia’s capital cities, despite a nation-wide increase in values over the month.
According to CoreLogic RP Data’s August Hedonic Home Value Index, dwelling values across the country rose by 0.3% during August, driven by Sydney’s month-on-month growth of 1.1%.
Along with Sydney, Adelaide
(0.7%) and Darwin
(0.3%) were the only other capital cities to experience a growth in dwelling values during August.
Values in Brisbane and Melbourne remained flat for the month, while Perth
(1.3%), Canberra (1.7%) and Hobart (1.1%) all experienced monthly drops in dwelling values.
While capital growth was slower during August than previous months, CoreLogic RP Data head of research said it is too early to claim the results as market slowdown.
”While the rate of capital gains slowed last month, today’s results are only one month worth of data. Therefore, we should be cautious about interpreting this as a slowdown in the overall trend of value growth. In fact, the quarterly and annual trend of capital gain remains high in Sydney and Melbourne,” Lawless said.
“The Spring season will provide a timely litmus test for the housing market given it’s a time when listing numbers normally increase materially. It will be important to monitor whether buyer demand keeps pace with the additional number of homes being advertised for sale,” he said.
The CoreLogic figures also contain somewhat of a surprise when it comes to the performance of house prices and unit prices during August, with house values increasing by 0.3%, while unit values grew by 0.8%.
“Over the past three months across every capital city except Melbourne and Brisbane, it has been the apartment sector that has shown the stronger growth result,” Lawless said
“This result comes at a time when apartment supply has ramped up substantially more than detached housing supply. To see such a broad-based over performance of units relative to houses provides some comfort for developers and purchasers that higher density stock values are appreciating.”
Annual weekly rental growth also hit a new record low over August, with the annual growth of median weekly asking rents growing by just 0.7% in the past 12 months.
Over the past 12 months, median weekly asking rents for houses have increased by 0.5%, while for units median weekly asking rents are up by 1.6%.
Gross yields are at record lows in both Sydney and Melbourne. A typical dwelling is attracting a gross yield of just 3.3% and 3.1% respectively across Australia’s two largest cities.
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