According to CoreLogic’s hedonic home value index Australian dwelling values fell for the ninth consecutive month in June, taking national dwelling values 1.3% below their September 2017 peak.

CoreLogic today released its June Home Value Index results which revealed that Australian dwelling values tracked lower in June, down 0.2% over the month to be 0.8% lower over the year.  June marks the ninth consecutive month-on-month fall in national home values, taking the cumulative decline to -1.3% since the housing market peaked in September last year.  

Index results as at 30 June 2018

2018-07--indices

 

According to CoreLogic research director Tim Lawless, despite recent and consistent monthly falls, national dwelling values remain 32.4% higher than five years ago. He said, “This highlights the wealth creation that many home owners have experienced over the recent growth phase, but also the fact that recent home buyers could be facing negative equity.”

“Tighter finance conditions and less investment activity have been the primary drivers of weaker housing market conditions and we don’t see either of these factors relaxing over the second half of 2018, despite APRA’s 10 per cent investment speed limit being lifted this month.”  

The June quarter results saw national dwelling values fall by half a percent, driven by a 0.8% drop in values across the combined capital cities. The capital city decline was partially offset by a 0.6% rise in values across the combined regional markets.  The largest decline amongst the capitals over the June quarter was in Melbourne, with dwelling values down 1.4%, followed by Sydney (-0.9%), Darwin (-0.8%) and Perth (-0.7%).   

Hobart continues to show the strongest capital gain trend amongst the capital cities with dwelling values rising a further 2.3% over the past three months.  Although housing market trends remain very positive across Hobart, the quarterly pace has eased relative to the March quarter when values were up 3.4%.  Values also trended higher across Adelaide (+0.9%), Brisbane (+0.3%) and Canberra (+0.2%) over the second quarter of 2018.

Outside the capital cities, the combined rest of state regions recorded a 0.6% rise in dwelling values over the quarter, although values did show a moderate fall in regional Queensland (-0.2%) and regional Western Australia (-0.1%).  The regional markets of Victoria have shown the highest rate of capital gain over the June quarter (+1.8%), closely followed by regional Tasmania (+1.7%).

Declines are more pronounced across the most expensive quarter of the market.  Based on the CoreLogic stratified hedonic index, values across the most expensive quartile of capital city properties were down 1.5% over the past three months while the least expensive quartile saw values hold firm.  Similarly, over the past twelve months, the most expensive end of the market recorded a decline of 3.6%, while the least expensive end of the market recorded a 1.4% gain.  

Declines across the most expensive sector of the capital city market is largely attributable to the declines in Sydney and Melbourne, where the upper quartile of property values fell by 7.3% and 2.5% respectively over the past twelve months.  Mr Lawless said, “A surge in first home buyer activity has helped support demand across the more affordable price points in these cities.”