Home values across Australia’s capital cities were up 1.2 per cent in January, taking the annual movement in dwelling values back into the black with a 1.8 per cent increase over the past twelve months.
The monthly RP Data-Rismark Home Value Index shows that dwelling values across Australia’s combined capital cities recorded a 1.2 per cent improvement over the month of January, cancelling out the -1.2 per cent drop in values recorded over the final quarter of 2012.
Since bottoming out in May 2012, dwelling values across the combined capital cities have recovered 3.1 per cent.
The year-on-year results have now moved firmly into positive territory, with capital city dwelling values 1.8 per cent higher over twelve months ending January 31st. Every capital city, apart from Melbourne (down 0.4 per cent), has recorded an increase in dwelling values over the past twelve months.
The gains in January were mostly focussed within the Brisbane, Sydney and Perth markets where values were up 2.0 per cent, 1.8 per cent and 1.7 per cent respectively.
Conditions across the Melbourne and Adelaide housing markets remained relatively subdued with dwelling values rising by 0.2 per cent and 0.4 per cent respectively.
According to RP Data’s research director, Tim Lawless, housing market conditions have started the year on a strong footing.
“These strong January results are likely to have seen some upwards seasonal bias, however the housing market has been on a clear recovery trend since June last year”, Lawless said.
“Capital gains aren't likely to remain this high over the coming months, however we are likely to see the recovery trend continue through 2013.”
Despite the improving market conditions in January, dwelling values across the combined capital cities remain 4.6% below their 2010 peak.
Additional data is also pointing towards an improvement in the Australia housing market. The average number of days it takes to sell a property was steadily decreasing prior to the seasonal slowdown in December-January and the rate of vendor discounting was also on a clear trend of improvement.
According to Mr Lawless, these metrics are a sign that vendors are gradually regaining some leverage in the market.
“The typical capital city house took fifty five days to sell in December last year, a vast improvement from the recent high of 76 days recorded in February last year”, he said.
“Additionally, vendors are now discounting their initial asking prices by an average of 6.6 per cent compared with -7.3 per cent a year ago.
“With stock levels remaining high, it is likely to remain a buyers’ market for some time, however I think we are now seeing some balance return to the negotiation table.
“Buyers are losing some of their negotiation power and homes are selling faster,” Mr Lawless concluded.