The CoreLogic Home Value Index results for October out today confirm a 1.2% rise in national dwelling values over the month, delivering the fourth straight month of rising values. The October result was the largest month-on-month gain in the national index since May 2015. The recent gains come after a broad-based decline in housing values, with the national index declining 8.4% between October 2017 and June 2019. The positive October result takes national dwelling values 2.9% off their June 2019 floor, however values remain 5.7% below their peak, highlighting that despite the recent gains, home values are at a similar level to where they were three years ago.
The strongest growth conditions continue to be centered in Melbourne and Sydney, however dwelling values trended higher across most of the capital cities as lower mortgage rates and improved credit availability spurred on buyer demand. Dwelling values were up across every capital city apart from Perth over the month, and based on the rolling three-month change, the only capitals where values fell were Perth (-1.7%) and Darwin (-1.2%).
According to CoreLogic research director Tim Lawless, the stronger rebound in Melbourne and Sydney can be attributed to a blend of factors; 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 recovery trend in Melbourne overtook Sydney in October, with dwelling values surging 2.3% higher over the month; the largest month-on-month gain since November 2009. Melbourne housing values have recovered 6.0% since moving through a trough in May 2019, while Sydney values are up 5.3% since the recent May low.
The smaller capitals have delivered a mixed performance, although the general theme is one of improving conditions. The rolling three-month change in Brisbane housing values (+1.1%) was the highest since December 2015, Adelaide (+0.1%) posted the strongest rolling quarter since December 2018, while Hobart (+1.0%) and Canberra (+2.4%) recorded the largest three month rise in values since March 2019 and May 2017.
The downwards trend in Perth and Darwin home values has continued, however both markets are showing an improvement in the trend rate of decline. The rolling three-month trend in Perth housing values recorded the smallest decline in fourteen months (-1.7%) and Darwin dwelling values posted a rare monthly rise in October. Both cities have seen dwelling values consistently trending lower since mid-2014, with Darwin down a cumulative 31% and Perth values 22% lower. 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.