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Dwelling values state by state

October 19, 2016

Dwelling values state by state

The housing market growth cycle has reached its 52nd month – that’s over 4 years – with September recording further gains across most capital cities.

While Sydney and Melbourne figures continue to dominate the headlines, there have also been some more surprising results in Canberra, Adelaide and Hobart.

A recent blog post by CoreLogic compares the latest figures on the housing market across the country. Corelogic’s Hedonic Home Value index shows a 1% month on month gain for combined capital cities. However, this figure masks the huge variation in growth from one region to the other.

The September quarter declared Melbourne the winner, with the city notching up a 5% increase in dwelling values – up 5.2% for houses and 2.9% for units.

Despite the hype around Sydney dwelling values, the housing market in Canberra actually showed the second highest rate of growth for the quarter, with values up 4.5%. Sydney came in third with a 3.5% increase for the quarter.

In the middle of the pack is Adelaide. In a surprising turnaround, dwelling values jumped up by 2.1% in September. The city recorded quarterly capital growth of 2.6%, and a very solid annual increase of 6.5%.

Unfortunately, the market in Darwin and Perth continues to struggle post mining boom, with dwelling values down 4.5% for the quarter in Darwin and down 3.2% in Perth. These cities last peaked in 2014, with Darwin now down 11.1% since then, and Perth down by 10.4%. Unfortunately, this brings dwelling values in Darwin back to levels last seen in 2009 and right back to 2007 levels in Perth.

Contrary to some expectations, the Brisbane housing market continues to struggle against the Queensland economy, and values dropped by 0.3% this quarter. Units in Brisbane are bringing down the overall value figures however, as unit values have fallen by 0.4% over the 12 month period, compared with a 4.9% rise for detached housing.

The table below shows the key figures for each city, which show the huge variation in changes from one city to the next.
Index results as at September 30, 2016

Sydney and Melbourne are both showing decelerating growth. Sydney’s growth peaked in June last year, when its quarterly pace of capital gain was 7.4%. Melbourne peaked at the same time, recording quarterly growth of 7.9%. Nevertheless, very high auction clearance rates in Sydney and Melbourne continue to fuel the market. Auction rates generally remain above 80% for Sydney, with some suburbs at almost 90%. Melbourne rates are consistently above 75%, with some suburbs showing rates well above 80%.

In contrast, the Canberra and Hobart markets have gathered pace over the past 12 months. A year ago, the annual rate of growth in Canberra was at -1.0%, but this is now around 7.6%. Hobart recorded an annual rate of growth of around 1.5% a year ago, and this has picked up to 6.5%. These cities tracked third and fourth after Sydney and Melbourne in terms of their annual change in dwelling values, with Canberra equalling Melbourne at an increase of 9%, and Hobart recording an 8.7% increase. Adelaide has also gathered pace since this time last year, with its 2.6% quarterly increase well above the 0.3% seen in the third quarter last year.

 

 

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