Property values might be falling, but they are still one-third higher than they were five years ago, according to property data and analytics company Corelogic’s latest figures.
CoreLogic’s home value index shows that Australian dwelling values fell 0.2 per cent in June, to be 0.8 per cent lower over the year. June marks the ninth consecutive month-on-month fall in national home values, taking the cumulative decline to 1.3 per cent since the housing market peaked in September last year.
Research director Tim Lawless remarked that, despite recent falls, national dwelling values remain 32.4 per cent higher than five years ago.
“This highlights the wealth creation that many home owners have experienced over the recent growth phase”, Lawless said.
“Tighter finance conditions and less investment activity have been the primary drivers of weaker housing market conditions and we don’t see either of these factors relaxing over the second half of 2018, despite APRA’s 10 per cent investment speed limit being lifted this month.”
The June quarter results saw national dwelling values fall by half a percent, driven by a 0.8 per cent drop in values across the combined capital cities. The capital city decline was partially offset by a 0.6 per cent rise in values across the combined regional markets. The largest fall amongst the capitals over the June quarter was in Melbourne, with dwelling values down 1.4 per cent, followed by Sydney (down 0.9 per cent), Darwin (0.8 per cent) and Perth (0.7 per cent).
Hobart continues to show the strongest capital gain trend amongst the capital cities with dwelling values rising a further 2.3 per cent over the past three months. Although housing market trends remain very positive across Hobart, the quarterly pace has eased relative to the March quarter when values were up 3.4 per cent. Values also trended higher across Adelaide (up 0.9 per cent), Brisbane (0.3 per cent) and Canberra (0.2 per cent) over the second quarter of 2018.
Outside the capital cities, the combined rest of state regions recorded a 0.6 per cent rise in dwelling values over the quarter, although values did show a moderate fall in regional Queensland (-0.2 per cent) and regional Western Australia (-0.1 per cent).
Declines are more pronounced across the most expensive quarter of the market. Based on the CoreLogic stratified hedonic index, values across the most expensive quartile of capital city properties were down 1.5 per cent over the past three months while the least expensive quartile saw values hold firm. Similarly, over the past twelve months, the most expensive end of the market recorded a decline of 3.6 per cent, while the least expensive end of the market recorded a 1.4 per cent gain.
Declines across the most expensive sector of the capital city market is largely attributable to the declines in Sydney and Melbourne, where the upper quartile of property values fell by 7.3 per cent and 2.5 per cent respectively over the past twelve months.
“A surge in first home buyer activity has helped support demand across the more affordable price points in these cities”, Lawless concluded.