CoreLogic Home Value Index results out today for January confirmed capital city dwelling values posted a 0.7% rise across the combined capital city regions with Hobart, Sydney and Melbourne leading the monthly gains.
The January result showed capital city dwelling values rose by 0.7% over the first month of the year, which was lower than the 1.4% rise recorded in December, but higher than the readings for October and November last year, when capital city dwelling values rose by 0.5% and 0.2% respectively.
Commenting on the January results, CoreLogic head of research Tim Lawless said, “The positive result was broad-based with every capital city (excluding Darwin) recording a rise in dwelling values over the month. The largest month-on-month gains were recorded in Hobart (+1.4%), Sydney (+1.0%) and Melbourne (+0.8%).”
On a quarterly basis, the CoreLogic January index results confirmed that all capital cities recorded a rise in dwelling values, with Hobart in the lead, recording a 5.8% rise in dwelling values over the three months to the end of January. Sydney (+2.7%) and Melbourne (+2.4%) also posted strong increases over the rolling quarter.
The annual trend in dwelling value appreciation remained steady when compared with last month. The annual growth rate across the combined capital cities was 10.7% over the twelve months ending January 2017, compared with 10.8% over the previous rolling twelve month period.
Sydney stood out as recording the highest annual capital gains with dwelling values up 16.0% over the past twelve months; the highest annual rate of growth since the twelve month period ending September 2015. Since the growth cycle commenced in June 2012, Sydney dwelling values have increased by a cumulative 70.5%.
The quarterly capital gain across Hobart was the highest of any capital city at 5.8%, taking the annual capital gain to 7.8%. Mr Lawless said, “While the growth trend in smaller cities such as Hobart can show higher levels of volatility, clearly the Hobart housing market is now well into its growth cycle. Strong housing market conditions are being driven by positive affordability of housing, as well as improving economic conditions and stronger migration trends.”
For Perth and Darwin, the rise in dwelling values over the rolling quarter may hint at a bottoming of the downturn, evident since 2014 according to Mr Lawless. He said, “Since dwelling values peaked in these markets they have reduced by a cumulative 7.7% in Perth and 7.5% in Darwin through to January 2017. Perth dwelling values were 2.1% higher over the past three months and Darwin values were up 1.8%.”
“Buyers still have a great deal of leverage in these markets, with listing numbers remaining high, long selling times and high rates of discounting. However, in another indication that conditions may be moving through the bottom of the cycle, transaction volumes moved higher across both markets prior to the seasonal downturn in December and January, whilst the average selling time reduced from previously higher levels. With economic and demographic conditions remaining weak in these markets, a recovery in dwelling values is likely to be a slow process.”