The latest CoreLogic Home Value Index shows the trend for capital gains has dropped from the peaks of 2015, with dwelling values continuing to track higher across each of the capital cities over the first four months of this year.
In April, the pace of capital gains rebounded from the relatively flat numbers recorded in March, with dwelling values increasing by an average of 1.7 per cent across the CoreLogic combined capitals’ index. The latest figures now take the combined capital
city dwelling values measure 3.3 per cent higher over the first four months of 2016.
Across the country, housing market trends remain mixed, however, CoreLogic Research Director Tim Lawless noted that the improvement in the rate of capital gains has been ‘broad-based’ during 2016 with every capital city except Perth recording a lift in dwelling values over the calendar year to date.
“The results show value growth moved at a faster pace compared with the final three months of 2015 when capital city dwelling values slid 1.4 per cent lower off the back of weaker market conditions in Sydney and Melbourne,” he said.
“While we’ve seen capital gains moderate substantially after peaking last year in Sydney and Melbourne, dwelling values continue to trend higher, just not as fast. The annual rate of growth in Sydney peaked at 18.4 per cent in July last year and has since moderated back to slightly less than half the peak rate of growth, at 8.9 per cent over the most recent twelve month period.”
Melbourne’s housing market continues to show a level of resilience to a slowing trend, however the annual growth rate has fallen from a recent peak of 14.2 per cent to the current annual growth rate of 10.1 per cent; Melbourne was the only capital city to see double digit growth over the past 12 months.
Perth and Darwin remain as the only two capital city markets to experience a decline in home values over the past 12 months, with Perth values down 2.1 per cent and Darwin values 3.7 per cent lower. Mr Lawless said, “With recent month-on-month increases in home values in these two cities, the declining trend rate is now levelling. This may be an early sign that these markets are beginning to find their cyclical trough after more than a year of annual declines.”
Over the current growth cycle, which commenced broadly in June 2012, capital city dwelling values have moved 34.4 per cent higher, led by a 52.7 per cent rise in Sydney home values, and a 37.1 per cent lift in Melbourne values.
“This result highlights the two-tiered nature of Australia’s housing market,” Mr Lawless said.
Brisbane experienced the third highest rate of dwelling value growth over the growth cycle to date; dwelling values in the city are now up 18 per cent. Australia’s regional markets also exhibited a lift in house values over the year to date.
“While house values across the non-capital city markets have generally underperformed compared with the capital city regions, regional house values moved 2.4 per cent higher over the first quarter of the year."