Figures show ongoing recovery

After a seemingly endless rollercoaster ride, home values finished the financial year on a higher note, according to figures released this week by property valuer RP Data.

Over the month of June, dwelling values rose by 1.9 per cent across the RP Data-Rismark capital city index.

The result effectively reverses the falls recorded over both April and May 2013 when values dipped by 1.7 per cent across both months.

Annually, capital city home values rose by 3.8 per cent throughout the 2012/13 financial year, which is a significant improvement from the 3.6 per cent fall in values over the previous year.

RP Data research director Tim Lawless commented that the capital gains recorded over the financial year highlight the positive impact that lower mortgage rates are starting to have on the housing market, Lawless noted.

The quarter-on-quarter results for June showed capital city dwelling values were up 0.2 per cent, and were largely driven by a strong result in the largest capital city, Sydney.

Melbourne and Brisbane recorded a slight fall in dwelling values over the quarter while the decline in Hobart, Darwin and Canberra was more significant.

Each capital city housing market has recorded an increase in values over the past year, with the exception of Hobart, where values have fallen by 1.8 per cent. Annual capital gains have ranged from as little as 0.2 per cent in Adelaide to as much as 6.1 per cent in Darwin and 6.0 per cent in Perth.

"Looking deeper into the index data reveals some interesting trends across the broad price-based segments of the housing market”, Mr Lawless said.

"The Sydney premium housing market has gathered some pace since the beginning of the year, likely fuelled by stronger equity market conditions as well as the fact that premium priced housing markets showed a larger correction than other broad price segments.”

The data shows that Sydney’s most expensive suburbs have seen dwelling values rise by 4.8 per cent over the past six months compared with a 3.2 per cent rise in values at the most affordable end of the market and a 4.6 per cent gain across the broad middle priced segment of the Sydney market.

“In the other major capitals, the most affordable and broad-middle priced segments of the housing market are typically showing the best value growth", Mr Lawless said.

“Premium markets are generally showing some appreciation, but still not at the same rate as lower-priced market segments.”

“If confidence levels remain high and labour markets continue to show a low rate of unemployment then we would expect that home values will continue to trend higher, albeit at a relatively measured pace", he concluded.