The first month of the New Year has seen a continuation in the broad-based housing market weakness with every capital city apart from Canberra recording a month-on-month fall in dwelling values.
CoreLogic’s hedonic home value index recoded a further 1.0% decline in national dwelling values over the first month of the year, taking the cumulative decline in Australian dwelling values to 6.1% since the market peaked in October 2017. The national index has fallen over 13 of the past 15 months and national dwelling values are now back to levels last seen in October 2016.
The weakest housing market conditions continue to be centered in Sydney and Melbourne, where values have fallen by at least 1% on a monthly basis each month since November last year. Both markets have seen an acceleration in the rate of decline over the past three months, with the rolling quarterly fall tracking at the fastest pace since the downturn commenced. Sydney dwelling values were down 4.5% over the three months ending January 2019 and Melbourne values were 4.0% lower.
The latest results take Sydney dwelling values back to levels last seen roughly two and half years ago (July 2016). In Melbourne, where the market peaked four months later than Sydney, dwelling values are back to January 2017 levels.
While most of the attention is on Australia’s two largest cities, weaker housing market conditions are evident across most of the capital cities. Every capital, apart from Canberra, recorded a month-on-month fall in dwelling values and only two capital cities (Hobart and Canberra) recorded a rise in values over the past three months.
While values aren’t falling across every broad region of the country, it’s clear that even within the areas where values are rising, the market has lost steam. The only regions where the annual change in dwelling values has improved are Darwin, where the annual rate of decline has eased from -9.7% a year ago to -3.5%, regional Tasmania where the annual rate of growth has risen from 4.9% a year ago to 9.2%, and regional NT where the annual decline of -1.0% has improved to an increase of 1.1%.
The regional markets are generally showing healthier conditions relative to the capitals. The combined regional index was down 0.6% over the three months ending January while the combined capitals index was down 3.3% over the same period. Three of the seven broad ‘rest-of-state’ regions recorded a decline in values over the past three months. Regional NSW values were 1.3% lower, while Regional Qld values were 0.3% lower and Regional WA values were down 0.8%.