The CoreLogic July Home Value Index results reported a 0.8 per cent rise over the month, taking capital city dwelling values 6.3 per cent higher over the first seven months of the year.
The first month of the new financial year saw another rise in capital city dwelling values, with the CoreLogic hedonic eight capital city aggregate index rising 0.8 per cent over the month to reach a new record high.
While values are still rising, four of Australia’s eight capital cities recorded a fall in dwelling values over the month. Simultaneously, the rate of growth across the combined capitals aggregate index slipped back a notch after bouncing higher in April and May.
Index results as at July 31, 2016
The annual rate of growth, which hit a recent peak at 11.1 per cent across the combined capitals index in October last year, is now tracking at 6.1 per cent; the slowest annual rate of appreciation since September 2013. Sydney and Melbourne have also seen the annual rate of growth slip back to below 10 per cent, with the July indices showing a respective 9.1 per cent and 7.5 per cent capital gain over the past twelve months.
Previously both Sydney and Melbourne’s capital gains peaked higher with Sydney reaching a peak rate of annual growth in July last year when dwelling values were rising by 18.4 per cent per annum, and when Melbourne values were increasing by 14.2 per cent per annum over the 12 months ending September last year.
Darwin and Perth remain as the only two capital cities to record a negative movement in dwelling values over the past twelve months, with values in Darwin down 7.6 per cent and Perth values falling by 5.6 per cent.
July marks the 50th month of the combined capitals growth cycle, which commenced in June 2012. Over the cycle to date, capital city dwelling values have risen by 38.3 per cent.
CoreLogic head of research Tim Lawless said, “This demonstrates the strength in the Sydney and Melbourne growth trend with dwelling values across the two largest capitals recording a cumulative 61.3 per cent and 42.0 per cent over the cycle to date.”
Hobart, where the growth trend has recently accelerated, has been the next best performer with values rising 17.6 per cent over the growth cycle followed by Brisbane (17.4 per cent), Adelaide (14.3 per cent) and Canberra (12.4 per cent).
Mr Lawless said, “The recent moderation in the rate of capital gains should be viewed as a positive sign that growth in dwelling values may be returning to more sustainable levels. However, the growth trend rate is still tracking considerably faster than income growth resulting in a deterioration of housing affordability.”
“Using Sydney as a case in point, the Australian National University estimates that Sydney household incomes have grown by approximately 4.5 per cent per annum since June 2012 while dwelling values are up 12.1 per cent per annum.”