National Dwelling Values Record First Rise In almost 2 Years
As we enter into the warmth of spring and the temperature rises, so too has buyer confidence with the latest property update signalling a steady market recovery.
Overall, dwelling values in August increased across five of the eight capital cities with the exception of Adelaide, Darwin and Perth. According to CoreLogic, national housing values have gathered momentum and increased +0.8% over the month. This is the first rise in values over a three month period since November 2017.
This is the first rise in National dwelling values over a three month period since November 2017.
Has lower interest rates, tax cuts and easing credit policy been behind this increase in buyer confidence? More importantly, will this acceleration in housing values continue throughout the year?
National property values: August 2019
The best performing areas over August were the largest metropolitan cities, Sydney (+1.6%) and Melbourne (+1.4%) followed by Brisbane (+0.2%), Hobart (+0.5%) and Canberra (+0.8%) all seeing modest increases.
On the flip side, Adelaide (-0.2%) and Perth (-0.5%) continue to trend in the negatives, with Darwin emerging as the weakest performing capital city, down -1.2% for an annual drop of -9.7%.
Although regional market values have continued to decline, regional Tasmania bucks the trend as the only major region where dwelling values are at an all time high up +4.4% over the past 12 months.
While housing values are on the rise, the same cannot be said for the rental market with national rents falling a further -0.1% over August. This is the third consecutive month of declining rental values. Interestingly, Brisbane, Adelaide and Hobart were the exceptions where rental rates increased.
Melbourne market update
Melbourne’s story has been similar to Sydney’s in August, showing the second-highest increase in dwelling values of +1.4%. Houses have had a 1.3% rise to $716,542 whereas units have had a 1.5% rise to $540,056. However, overall dwelling values are about -9.5% below Melbourne’s previous peak.
August is the third month in a row where Melbourne dwelling values have increased. This has also been reflected in the climbing auction clearance rates, now at their highest since early 2017.
Melbourne has shown the second-highest softening of rental yields, to 3.6%, and has seen a decrease in rental rates over the month.
Over the past year, areas that have declined the most in dwelling values in Victoria are Outer East Melbourne (-9.3%) and Mornington Peninsula (-9.9%).
There has been evidence of growth returning to Geelong over the past quarter with the area showing an overall increase in dwelling values. Warrnambool and South West have been one of the top-performing regional areas in Australia with a +1.9% annual change in dwelling values over the past year.
What does all this mean and what can we expect?
All signs seem to be pointing to a property market rebound with housing credit restrictions easing and mortgage rates likely to reduce further.
Clearance rates are also currently at the highest levels since early 2017 in Australia’s major capital cities of Sydney and Melbourne.
The upcoming spring selling season will be the real test of the market recovery as stock levels and auction volumes rise.
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