National dwelling values slipped 0.1% in February, taking housing values lower by 0.8% since peaking in September, according to CoreLogic’s February Hedonic Home Value Index results.
The slight decline in national dwelling values in February was more moderate than the 0.3% declines recorded over each of the previous two months. However, this marked the first time that national values had fallen for five consecutive months since March 2016.
“There continues to be a divergence between capital city and regional markets, with the combined capital city index falling by -0.3% over the month, compared to a 0.4% increase in combined regional values,” the report said.
Over the month, values dropped in every capital except Hobart (+0.7%) and Adelaide, which registered no change. The biggest monthly declines were recorded in Darwin (-0.9%) and Sydney (-0.6%), and values were lower in Melbourne (-0.1%), Brisbane (-0.1%), Perth (-0.2%), and Canberra (-0.3%).
“The overall softening in the market becomes more evident when looking at the change in values over the past three months,” said Tim Lawless, CoreLogic’s head of research.
Over the three months to February, Adelaide (+0.1%) and Hobart (+3.2%) were the only capitals where values rose. Sydney, which has been the strongest market for value growth in recent years, saw the largest fall in values over the three-month period, down by -2.4%.This was followed by Darwin, where values fell further by -2.0% over the quarter.
On an annual basis over the 12 months to February, national dwelling values increased by 2.2%, the slowest annual rate of growth since August 2016. “The gap between annual growth rates across the combined capital cities (2.0%) and the combined regional markets (2.8%) has continued to widen over the past month as regional areas outperform the capitals,” the report said.
Rental rates have been rising over the same period
Although dwelling values have been falling over the past three months, rental rates have been going in the opposite direction. They’ve been higher over the year in all capital cities, aside from Perth and Darwin, and within all regional markets except for regional Western Australia.
“The markets experiencing the greatest increases in rents over the past year have been Hobart (10.2%) which has recorded double-digit annual rental growth for the first time since August 2009 and regional Tasmania (7.6%) which is experiencing the strongest rental growth since the end of 2008,” the report said.
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