Home values continued to lift in October as lower mortgage rates and improved credit availability spurred buyer demand, property data analyst Corelogic announced this week.
Corelogic’s latest Home Value Index results show a 1.2 per cent rise in national dwelling values over the month, delivering the fourth straight month of rising values. The October result was the largest monthly gain in the national index since May 2015.
The recent gains come after a broad-based decline in housing values, when the national index fell 8.4 per cent between October 2017 and June 2019.
The positive October result takes national dwelling values 2.9 per cent off their June 2019 floor, however values remain 5.7 per cent below their peak. Home values are now at a similar level to where they were three years ago.
Dwelling values were up across every capital city except Perth over the month. In Melbourne, values surged 2.3 per cent higher over the month to be the largest month-on-month gain since November 2009. Elsewhere, Sydney values rose 1.7 per cent, Brisbane 0.8 per cent, Hobart 0.9 per cent, Canberra 0.6 per cent, Adelaide 0.4 per cent and Darwin 0.3 per cent.
According to CoreLogic research director Tim Lawless, the stronger rebound in Melbourne and Sydney can be attributed to a blend of factors, such as tighter labour market conditions and stronger population growth relative to the other capitals, coupled with the stimulatory effect of the lowest mortgage rates since the 1950’s, and improved access to credit. Stamp duty exemptions for first home buyers purchasing under specific price points have added additional stimulus to housing demand.
The downwards trend in Perth and Darwin continued, however both markets are showing an improvement in the trend rate of decline. Perth is now recording the lowest median house value of any capital city ($451,800) and Darwin house values are a close second with a median of $468,300.
Unsurprisingly, the Northern Territory and Western Australia are also showing the highest proportion of first home buyer activity, with first time buyers not weighed down by negative equity and with the ability to take advantage of very affordable housing in these regions.