Headline capital city value change figures only tell part of the story, more detailed insights can be seen by observing changes in dwelling values across smaller geographies. In this week’s blog we look at value changes across the SA4 regions of the capital cities, noting that Hobart, Darwin and Canberra do not have any SA4 regions that are smaller than the whole capital city areas.
The above chart shows the monthly, quarterly, annual and 5 year annual changes in values across the SA4 regions of Sydney to February 2018. Immediately noticeable from the chart is the fact that conditions over the past 12 months have been dramatically different to those over the past five years in which the weakest performing region, Sutherland, recorded compound annual growth of 8.7% while the strongest market for value growth, Outer South West, has seen values rise at 11.5% annually. Over the 12 months to February 2018, only six of the 15 SA4 regions have recorded increases in values and they have been mixed with regards to their locations however, generally they have been outer markets. Over the three months to February 2018, values have fallen across all SA4 regions with the largest declines recorded in the Ryde and Baulkham Hills (both 4.0%) regions while the most moderate declines have occurred in the Outer South West (-0.7%), Outer West and Blue Mountains (-0.8%) and Central Coast (-0.8%).
Over the three months to February 2018, Melbourne dwelling values have fallen by -0.4% and as the above charts show, the largest declines have been experienced across the inner areas of the city which are also generally the most expensive. Each of the Inner South, Inner East and Inner regions have recorded quarterly value falls in excess of 1.0%. While higher value inner-city areas have seen the largest falls, the strongest market growth is the Mornington Peninsula which has a mix of higher and lower valued housing stock, in which values have increased by 1.8%. The recent weakness in inner city markets is also evident when looking at the annual change, although no regions of Melbourne have recorded value falls, higher-priced inner city areas have seen comparatively lower value growth while the West (13.3%) and North West (12.8%) have recorded the greatest increases in values. Certain regions of the city have actually recorded stronger growth in values over the past 12 months than they have over the past five years (generally the more affordable markets) while inner city markets have dramatically underperformed their five year average rates of value growth over the past year.
Growth in Brisbane has been much more moderate than that within Sydney and Melbourne over recent years however, the recent declines have also been more moderate. Over the past three months values are -0.1% lower while over the past year values have increased by 1.8% and the compound annual rate of growth over the past five years has been 3.6%. Over the past three months, the change in values across Brisbane has been mixed with the greatest increases occurring in Ipswich and Moreton Bay – South (both 1.0%) while the largest falls have occurred across the South (-1.1%) and Brisbane Inner City (-1.0%). In general terms, lower value regions have seen growth while higher value regions as well as the inner city unit market have experienced declines. Over the past 12 months, the regions that recorded the greatest value growth were North (3.4%) and Moreton Bay – South (3.0%) and interestingly North is one of the city’s most expensive housing markets while Moreton Bay – South is one of the most affordable. The weakest markets for value growth were South (0.6%) and Ipswich (0.7%) which again vary from more expensive to more affordable respectively. Over the past year, not one region of the city has recorded value growth in excess of its 5 year annual compound growth rate. What’s also interesting is the South region has recorded the greatest growth over the past five years but the weakest growth over the past quarter and year.
Over the three months to February 2018, Adelaide dwelling values increased by 0.1% compared to an increase of 2.2% over the year and compound annual growth of 3.4% over the past five years. Note that with its smaller population Adelaide has fewer SA4 regions within. Over the past five years, Central and Hills which is the more expensive region of the city, has seen the greatest value growth (4.0%) followed by the West (3.7%), The North is the most affordable region of the city and has recorded the weakest value growth (2.7%). Values are higher across all regions over the city over the past year however, it has been somewhat of a reversal of fortunes with lower value markets recording the greatest growth and more expensive regions recording comparatively lower growth. Quarterly data shows slightly different trends with the most expensive region (Central and Hills) and the most affordable region (North) recording value falls while the South and West have recorded increases in values.
Unlike the other major capital cities, dwelling values have been falling in Perth for a number of years and continue to decline across most sub-regions. Values have fallen by -0.7% over the past three months, are -2.7% lower over the past year and have fallen at an annual rate of -1.1% over the past five years. Over the past three months, Mandurah is the only region of the city in which values have increased (1.5%) while the greatest falls have occurred in the North West (-1.4%) and North East (-0.9%). Over the year, the Inner region is the only market in which values have risen and they are barely higher (0.1%) while the South East (-4.7%) and South West (-3.4%) have recorded the greatest falls. The South East (-1.7% pa) and North West (-1.4% pa) have recorded the greatest falls over the past five years while the most moderate increases have occurred in Mandurah (-0.2%) and Inner (-0.3%). Interestingly, the Inner is one of the most expensive regions of the city while Mandurah is the most affordable indicating there is no clear trend of stronger demand for higher or lower valued stock.
This data is very valuable to look at because it highlights that although the headline figures may point to the performance across the whole city, individual markets can be acting in a very different manner.