02 Nov 2015

Housing growth conditions continue to ease in October as housing market shows further signs of cooling

The hottest housing markets in the nation, Sydney and Melbourne, have continued to see an easing in the rate of capital gain over the month of October, however values continued to show a modest rise of 0.3 per cent, and 0.6 per cent respectively across Australia’s two largest capital cities over the month.

More broadly, dwelling values across the combined capital city index moved 0.2 per cent higher over the month of October, were up by 1.4 per cent over the quarter, and 10.1 per cent higher over the year. The annual rate of growth across the combined capitals index has been easing since July this year when the index was rising at 11.1 per cent per annum.

Index results as at October 31, 2015

2015-11-02--indices
According to CoreLogic RP Data head of research, Tim Lawless, a range of factors are contributing to the slowdown.

“It’s not just the fact that mortgage rates have recently risen outside of any lift in the cash rate. We are also seeing approximately a 30 per cent premium on investment related mortgage rates, tighter lending standards and borrowers generally requiring a larger deposit.

“Gross rental yields at record lows and affordability constraints are acting as a further disincentive, particularly in Sydney where the median unit price is equal to, or higher than the median house price in every other capital city. Additionally, new housing supply is moving through record levels which should help to ease the upwards trajectory of home values.”

“Since the end of 2008, the Sydney housing market has recorded a cumulative capital gain of 77.0 per cent, while Melbourne values have moved a cumulative 66.6 per cent higher over the same time frame. Based on the median selling price at the end of 2008, Sydney home owners have accrued approximately $316,000 in gains from the housing market compared with around $246,000 in Melbourne.”

“While the rate of growth is significant, it is important to remember that this growth is across two cycles; dwelling values were broadly tracking backwards during both the 2008 calendar year and between late 2010 through to mid-2012.”

“The only capital city where home owners have seen the value of their homes move lower since the end of 2008 is Hobart where the CoreLogic RP Data index is down 0.4 per cent (approximately $1,155) since the end of the GFC,” Mr Lawless said.

The weakest housing market conditions continue to be found in Darwin and Perth where dwelling values are down 3.7 per cent and 3.6 per cent respectively over the past twelve months.

According to Mr Lawless, the slowdown in resources-related infrastructure spending has caused ripples of economic weakness that are likely to persist for some time.

“Capital expenditure relating to the mining and resources sector has fallen substantially which means tougher labour conditions and little in the way of migration which has previously fueled housing demand in these areas,” he said.

END.


Read full report with charts and graphs here

Media inquiries contact:
CoreLogic National Communications Manager – 07 3114 9879  or media@corelogic.com.au

Introduction to the CoreLogic RP Data Daily Hedonic Home Value Index methodology:
The CoreLogic RP Data Hedonic Home Value Index is calculated using a hedonic regression methodology that addresses the issue of compositional bias associated with median price and other measures. In simple terms, the index is calculated using recent sales data combined with information about the attributes of individual properties such as the number of bedrooms and bathrooms, land area and geographical context of the dwelling. By separating each property comprising the index into its various formational and locational attributes, differing observed sales values for each property can be separated into those associated with varying attributes and those resulting from changes in the underlying residential property market. Also, by understanding the value associated with each attribute of a given property, this methodology can be used to estimate the value of dwellings with known characteristics for which there is no recent sales price by observing the characteristics and sales prices of other dwellings which have recently transacted. It then follows that changes in the market value of the stock of residential property comprising an index can be accurately tracked through time. CoreLogic RP Data owns and maintains Australia's largest property related database in Australia which includes transaction data for every home sale within every state and territory. CoreLogic RP Data augments this data with recent sales advice from real estate industry professionals, listings information and attribute data collected from a variety of sources. For detailed methodological information please visit www.corelogic.com.au.


Key statistics, tables and graphs
available in PDF format

Download PDF

About CoreLogic

CoreLogic Australia is a wholly owned subsidiary of CoreLogic (NYSE: CLGX), which is the largest property data and analytics company in the world. CoreLogic provides property information, analytics and services across Australia, New Zealand and Asia, and recently expanded its service offering through the purchase of project activity and building cost information provider Cordell. With Australia’s most comprehensive property databases, the company’s combined data offering is derived from public, contributory and proprietary sources and includes over 4.4 billion decision points spanning over three decades of collection, providing detailed coverage of property and other encumbrances such as tenancy, location, hazard risk and related performance information.

With over 20,000 customers and 150,000 end users, CoreLogic is the leading provider of property data, analytics and related services to consumers, investors, real estate, mortgage, finance, banking, building services, insurance, developers, wealth management and government. CoreLogic delivers value to clients through unique data, analytics, workflow technology, advisory and geo spatial services. Clients rely on CoreLogic to help identify and manage growth opportunities, improve performance and mitigate risk. CoreLogic employs over 650 people across Australia and in New Zealand. For more information call 1300 734 318 or visit www.corelogic.com.au.

Get In Touch

Call Us On 1300 734 318

More Options

Already a Subscriber?

Get training

Call Us At 1300 734 318