As was reported in CoreLogic’s October Home Value Index Results, growth conditions were flat across both the combined capital cities and the combined regional areas of Australia.
“Throughout the individual capital cities, falls were recorded in Sydney (-0.5%), Darwin (-1.6%) and Canberra (-0.1%), while values were unchanged in Adelaide and Perth [and] rose elsewhere,” said Cameron Kusher, head of research at CoreLogic.
The rate of growth in dwelling values appears to be slowing across the markets, and this is highlighted when analysing the change in values over the three months to October.
“Over the [three months to October], national values have increased by 0.3% with combined capital city values 0.4% higher and regional values falling by -0.1%,” Kusher said. “Over the three months, values have fallen in Sydney (-0.6%), Perth (-0.7%) and Darwin (-4.4%).
“Across the remaining capital cities, dwelling value increases have been recorded in Melbourne (+1.9%), Brisbane (+0.6%), Adelaide (+0.1%), Hobart (+3.3%) and Canberra (+1.1%). The -0.6% quarterly fall in Sydney dwelling values is the greatest since March 2016.”
Over the 12 months to October of this year, national dwelling values have risen by 6.6%, with the combined capital cities registering increases of 7% and combined regional markets seeing values rise by 4.9%.
“Hobart is the capital city with the fastest annual rate of value growth (12.7%) followed by Melbourne (11.0%), Sydney (7.7%), Canberra (6.4%), Adelaide (4.6%) and Brisbane (2.7%),” Kusher said. “Values have continued to decline over the past year in Perth (-2.5%) and Darwin (-5.7%).”
Most affordable suburbs saw slower price growth
The CoreLogic Stratified Hedonic Index indicates that the slowdown is being led by the lower end of the housing market.
Twenty-five percent of the most affordable properties across Australia saw values decline by 0.3% over the three months to October 2017. In contrast, the middle 50% of suburbs saw values increase by 0.8%, and the most expensive 25% of suburbs saw values rise by 0.4%.
“The most affordable suburbs have seen values rise by just 2.2% over the past year compared to 6.9% across the middle 50% of properties and 8.2% across the most expensive 25% of properties,” Kusher said.
Across the individual capitals, the trends are more diverse. In Sydney, Melbourne, and Darwin, the most expensive properties have been weakest in terms of growth over the year. Meanwhile, in Brisbane, Adelaide, Perth, Hobart, and Canberra, the most affordable properties have recorded the lowest value changes over the year.
“The best performing segment of the market has been the most affordable properties in Sydney, Melbourne and Darwin, the middle market has been the strongest for growth in Adelaide, Hobart and Canberra, and the most expensive properties have recorded the strongest growth in Brisbane [and] Perth,” Kusher said.
“The results point to varying drivers of market demand with the strength in Sydney and Melbourne at the lower end of the market, while in most other capital cities the more expensive properties appear to be more sought after.”