The country’s home market downturn lingered through August as CoreLogic national home value index was seen falling by 0.3% over the month. This marks the eleventh consecutive drop in dwelling values since peaking in September 2017, resulting to a cumulative 2.2% decrease.
Weaker housing market conditions can be associated with a lot of factors, including tighter credit environment which drove slower market activity, especially amongst investors. Further, lesser active buyers caused inventory levels to go up and reduced competition in the market.
“Collectively, these factors have been compounded by affordability challenges, reduced foreign investment and a rise in housing supply,” said CoreLogic Head of Research Tim Lawless.
CoreLogic noted that dwelling values in five of the eight capitals declined over the month. Meanwhile, Adelaide (0.3%), Darwin (0.1%) and Canberra (0.5%) trended higher.
Providing an update on each city, the report said that Melbourne is now Australia’s weakest capital city housing market, with dwelling values falling 2.0% over the three months ending August. Perth’s figures were nearly at the same level with a record of 1.9% decrease over the past three months.
Registering higher numbers, Adelaide outranked Hobart and rose to the top of the quarterly performance stakes during the same period.
“Adelaide dwelling values were half a percent higher over the past three months, with quarterly gains also recorded in Canberra (+0.4%) as well as Hobart and Brisbane, both up +0.1%.”
One of the highlights of the report was finding out that the weakest housing market conditions are concentrated in Sydney and Melbourne over the year to date. As it is known, dwelling values were previously rising the fastest in these areas, but, now, these cities’ numbers have fallen 3.5% and 3.3%, respectively over the first eight months of the year.
“Considering the sheer size of the cities; Sydney and Melbourne comprise approximately 60% of Australia’s housing market by value, and 40% by number, the weaker performance in these cities has a significant drag down effect on the combined capitals and national reading of the market,” explained CoreLogic.
Notably, the regional markets also continued to slow down. For the second consecutive month across the combined rest of state index, these markets’ values dropped 0.2% over the month and 0.6% lower over the rolling quarter.
Moreover, it was observed that Geelong remains the best performing regional market in the country, with dwelling values up 11.8% over the year. Regional areas of Tasmania held the second and third spot on the regional leagues tables, with dwelling values up 9.9% across the South East region of Tasmania and 9.3% higher across Launceston and the North East region of Tasmania.
“Geelong was the only regional market that recorded double-digit value growth over the past 12 months while a year ago, eight regional markets had recorded double-digit value growth,” noted CoreLogic.
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