Over the three months to July 2019, national dwelling values have continued to decline, falling by -0.5% however, the monthly rate of decline has been slowing right throughout 2019 with no change in values throughout the month of July. The improvement in market conditions are more evident across the combined capital cities while the combined regional markets have seen the magnitude of declines trend higher throughout 2019. The improvement in housing market conditions is largely being driven by a slowing rate of decline in values in Sydney and Melbourne throughout 2019 with increases over the past two months.
Looking at the capital cities, Melbourne is the only city in which values have increased over the past three months (0.1%) however, a number of cities have recorded a slowing of the rate of decline. Dwelling values remain lower than their peak across all 46 capital city SA4 regions wit the magnitude of declines varying greatly city-to-city and within the individual capital cities. While values are lower than their peak cross all SA4 regions. 13 individual regions have either recorded an increase in value or avoided declines over the past three months.
Looking at the 13 regions in which values have not fallen over the past three months, interestingly some of these areas that have seen comparatively large value declines from their peak. To July 2019, Sydney dwelling values have fallen -14.7% from their peak. Over the past three months, seven Sydney regions have avoided falls and Baulkham Hills and Hawkesbury (-15.7%), Inner West (-15.9%), North Sydney and Hornsby (-15.4%) and Sutherland (-16.7%) have each recorded larger overall falls than the Sydney benchmark. It is a similar story for Melbourne, four SA4 regions have avoided value falls over the past three months, two of which were the Inner East and Inner South which have seen some of the largest overall declines of all Melbourne regions, down -15.0% and -14.4% from peak respectively.
Outside of regions of Sydney and Melbourne, Hobart and Adelaide’s North have also recorded an increase in values over the past three months. Only 15 of the 46 capital city SA4 regions have recorded falls in excess of 1.0% over the past three months.
As noted earlier, the combined regional markets are not showing the same early signs of a market recovery that are visible for the capital city markets. Furthermore, some regional markets have seen significant overall declines. For the capital cities, Perth's Mandurah has seen the largest overall value decline (-35.7%) while three regional markets have recorded larger total falls.
Of the 42 regional SA4 areas, 16 have either recorded an increase in values or no decline over the past three months which is greater than the 13 amongst the capital cities. The reason for the continual declines in regional values with no real signs of an improvement is more to go with the fact that most of the larger regional markets continue to record value falls.
What is somewhat interesting is that some of the markets that have recorded significantly value falls over recent years have actually recorded value increases over the past three months. Most of these are located in Qld: Townsville, Cairns, Central Qld and Mackay-Isaac-Whitsunday while Outback SA has seen the largest value increase over the three months despite values being more than 20% below their peak.
Unlike the capital city SA4 regions, two regional markets have managed to avoid declines with values sitting at record-highs. These regions are West and North West Tas and South East SA.
Some of the more populous regional markets have continued to record value falls over the past three months with areas like Townsville, Cairns, Richmond-Tweed, Toowoomba and Launceston and North East the main exceptions. Larger regional areas such ads Newcastle and Lake Macquarie, Gold Coast, Sunshine Coast, Geelong, Illawarra and Bunbury have continued to see values fall.
Overall, the early signs are there that housing market have stabilised however, this evidence is much more prevalent in capital cities than regional markets. Within the capital cities, the improved conditions are mainly being driven by Sydney and Melbourne and interestingly, in many instances it is those areas where values have recorded larger declines over recent years that are showing the largest improvement. Over the coming months it will be interesting to see if the improvement continues and whether it spreads from Sydney and Melbourne to other capital cities and regional markets.