House prices in Australia’s capital cities have risen more than 11 per cent in the last year, reveal staggering new figures.
“The annual growth rate across the combined capitals hasn’t been this strong since the twelve months ending June 2010,” comments Tim Lawless, head of research for Corelogic.
Corelogic’s figures show that capital city property values rose 11.7 per cent in the year to February 2017, and 1.4 per cent from the previous month.
Sydney led growth on an annual basis, but on a monthly level, the once-shining star of capital gain has been overtaken, with Canberra coming out on top, with prices up 3.2 per cent from January (ahead of Sydney’s 2.6 per cent). Melbourne saw prices rose 1.5 per cent, followed by Hobart (1 per cent), while prices fell in Darwin (down 4.3 per cent), Perth (down 2.4 per cent) and Brisbane (down 0.4 per cent).
“At a combined capital city level, growth conditions have been rebounding since the middle of last year when, on two separate occasions, interest rates were cut, and investor demand commenced trending higher,” adds Lawless.
“Prior to capital gains accelerating half way through last year, the growth trend had been moderating, reaching a cyclical low point over the twelve months ended July 2016 when the annual change in capital city dwelling values slowed to 6.1 per cent.”
The current growth cycle is approaching 5 years in duration.
Since capital city dwelling values started to rise in June 2012, capital city dwelling values have increased by a cumulative 47.3 per cent, ranging from a 74.9 per cent capital gain in Sydney, to a net rise of 6 per cent in Perth. Sydney, and to a lesser extent, Melbourne, have remained at the top of the capital gain tables over the past two cycles. Since the beginning of 2009, Sydney dwelling values have more than doubled, rising by 104.5 per cent while Melbourne values are 87.7 per cent higher.
“In Sydney, where the annual rate of growth is now 18.4 per cent, this is the highest annual growth rate since the twelve months ending December 2002 when the housing boom of the early 2000’s started to slow,” he adds.
Hobart house price growth overtakes Sydney and Melbourne
3rd February 2017
Hobart’s housing market is well into its growth cycle, as its price growth has overtaken that of Sydney and Melbourne.
The two capital cities have dominated capital growth in Australia in recent years, as demand and tight supply levels have driven prices up. The latest figures from CoreLogic show that Sydney recorded the highest annual price growth in the last 12 months, with property values up 16 per cent – the highest annual rate since the 12 months ending September 2015. Since the growth cycle commenced in June 2012, Sydney dwelling values have increased by a cumulative 70.5 per cent.
However, in recent months, Hobart has emerged as a growing hotspot for price growth. Hobart led month-on-month gains at the start of 2017, with prices up 1.4 per cent, ahead of Sydney (1 per cent) and Melbourne (0.8 per cent). On a quarterly basis, Hobart was also top of the capital city heap, with prices up 5.8 per cent.
“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,” says CoreLogic head of research Tim Lawless. “Strong housing market conditions are being driven by positive affordability of housing, as well as improving economic conditions and stronger migration trends.”
Overall, capital city house prices rose 0.7 per cent month-on-month, according to CoreLogic, down from the 1.4 per cent recorded in December 2016, but up on October and November’s readings.
“The positive result was broad-based with every capital city (excluding Darwin) recording a rise in dwelling values over the month,” adds Mr. Lawless.
Photo: Mike Cogh
Sydney house prices soar $10,000 a month
5th January 2017
Sydney house prices soared by $10,000 a month in 2016, reveal new figures.
The staggering growth highlights just how heated the Australian city’s market has become in recent years. According to CoreLogic data, Sydney’s dwelling values have almost doubled since the global financial crisis, rising by 97.5 per cent since January 2009.
Melbourne dwelling values have increased by 83.5 per cent over the same period, with the two capital cities far ahead of the others, where house prices have risen at “substantially lower rates”.
In 2016, capital gains accelerated in the capital cities, taking the calendar year growth rate to the fastest pace since 2009, according to CoreLogic.
December 2016 saw capital city dwelling values rise by 1.4 per cent, taking the annual capital gain for 2016 to 10.9 per cent. Factoring in gross rental yields and capital gains, housing as an asset class, earned a total annual return of 14.7 per cent based on the combined capital cities index results.
Across Australia’s capital cities, the annual change in dwelling values for 2016 ranged from -4.3 per cent in Perth to 15.5 per cent in Sydney, with Melbourne and Hobart also showing annual capital gains higher than 10 per cent.
CoreLogic head of research Tim Lawless says: “Capital city growth rates have also shown a growing divergence between the broad housing product types. Over the past twelve months we have seen capital city house values rise by 11.6 per cent, while unit values have increased by roughly half the pace at 5.9 per cent.”
“The divergence in growth rates is the most distinct in Melbourne and Brisbane, where concerns around unit oversupply have eroded buyer confidence,” he adds. “Melbourne house values are up 15.1 per cent over the year compared with a 1.7 per cent rise in unit values, while Brisbane house values are 4 per cent higher over the year, with unit values falling by -0.2 per cent.”
Strong population growth and economic activity have driven value growth in Sydney and Melbourne. More recently, though, strong growth trends have spread to Hobart and Canberra, as well as many of the coastal and lifestyle markets where values are now also rising swiftly. Indeed, the latter two markets could now become the most profitable property hotspots in Australia, as Sydney and Melbourne’s capital growth erodes potential yields for investors.
Darwin leads house price growth Down Under
5th December 2016
Darwin is leading house price growth in Australia, according to new figures from CoreLogic RP Data.
Sydney and Melbourne have long dominated the property price leagues Down Under, racing ahead of all the other capital cities. Indeed, on an annual basis, they lead price growth, with values up 13.1 per cent and 11.3 per cent respectively in November 2016, above the capital city average of 9.3 per cent and significantly faster than their closest contender, Canberra (8.4 per cent).
In more recent months, though, both of the heated markets are starting to cool, as buyers look to other destinations that are more affordable. Now, Darwin is leading price growth, with prices up 3.7 per cent both month-on-month and quarter-on-quarter.
On an annual basis, Darwin’s price growth is back into the black for the first time since February 2015, with values up 1.1 per cent. Tim Lawless, Head of research with CoreLogic RP Data, notes that results for smaller cities such as Darwin, can tend to show higher levels of volatility.
“The November results also show a rise in transaction numbers across the Darwin market over recent months, supporting the moderate improvement in market conditions that the hedonic index is showing,” he comments.
Overall, the index shows a rise in dwelling values across every capital city excluding Melbourne over the month. Throughout November, capital city dwelling values rose by 0.2 per cent on average – the softest result since December 2015, when capital city dwelling values were unchanged over the month.
According to Mr. Lawless, the soft performance across the combined capital city reading was attributable to Melbourne’s 1.5 per cent fall.
“Delving into the Melbourne results in more detail showed that unit values were down a larger 3.2 per cent in November, while Melbourne house values declined by 1.3 per cent over the month.”
On an annual basis, every capital city except for Perth is now showing a positive annual trend in dwelling value growth.
Mr Lawless says: “Disaggregating this growth figure [over the 4.5-year cycle] highlights the diversity in market conditions with Sydney and Melbourne at one end of the spectrum experiencing an increase in dwelling values over this period of 67.3 per cent and 46.3 per cent respectively, while at the other end of the spectrum, Perth and Darwin values have broadly declined since 2014. Perth values are 6.9 per cent higher since the cycle commenced in June 2012, while Darwin values are 13.8 per cent higher over this period.”
Illawarra leads regional house price growth Down Under
12th September 2016
Illawarra is now leading regional house price growth in Australia. The area saw house prices soar 14.3 per cent in June 2016 quarter, the largest of any regional market, with apartment units surging in value by 13.9 per cent.
The only regional market to record a fall in values was Townsville, according to CoreLogic’s new report, with house prices dropping 4.5 per cent. Apartment unit values in the city dropped by 3.7 per cent. Unit values were also lower across the regions of Wide Bay at -1.2 per cent, and Bunbury at -6 per cent.
In NSW, Newcastle and Lake Macquarie, and the Richmond-Tweed regions, saw home values rise by less than 10 per cent compared to stronger levels of growth in the Illawarra region.
In Queensland, the two leading lifestyle markets of the Gold Coast and Sunshine Coast were the strongest performing regions across the state over the period, with an increase for both house and unit values. Sales were mixed, but activity remained “well above” the five-year average.
In Victoria, sales activity in Geelong and Latrobe–Gippsland dropped by 2 per cent over the year; however, median values and rental rates increased. Geelong recorded the strongest performance, with house values rising 5.6 per cent and unit values up 3.4 per cent.
In Western Australia, the Bunbury region recorded mixed performance over the year. House values rose 3 per cent, while unit values fell 6 per cent.
CoreLogic attributes the growth to the returning demand for property outside of Australia’s capital cities.
“Our latest data points to an increase of value growth in regional markets, particularly those which are located adjacent to capital cities,” comments CoreLogic research analyst Cameron Kusher.
However, the trend is likely driven by buyers being priced out of the capital cities – in particular, the over-heated markets of Sydney and Melbourne – and turning to the more affordable adjacent areas.
“Home owners in Sydney and Melbourne have seen a substantial rise in housing equity over recent years. Subsequently we are seeing some evidence that these buyers are starting to look for holiday and investment properties in certain regional markets which is also providing an impetus for some of the value growth we are currently seeing,” adds Kusher.
High end of Australian market leads price growth
26th April 2016
The most expensive suburbs in Australia’s capital cities are leading house price growth, reveals new research.
Statistics from CoreLogic RP Data found that Melbourne enjoyed the strongest price growth in the country during 2015, with values up 9.8 per cent (down from 14.2 per cent in September 2015). Within the city, though, analysis of the suburbs presents a more nuance depiction of the market’s performance: the most affordable suburbs saw values climb 9.7 per cent, compared to the mid-section’s 10.5 per cent and the most expensive surburbs’ 10 per cent climb.
“Growth is fairly steady across the affordable market but slowing across the middle and most expensive suburbs,” explains CoreLogic.
In Sydney, the most affordable suburbs have seen values rise by 8 per cent over the last year, ahead of the middle segment (6.6 per cent), but behind the top end of the market (8.8 per cent). Across each segment the annual rate of value growth is slowing, although the premium end of the housing market continues to record a higher rate of capital gain.
Brisbane’s most expensive suburbs recorded value growth of 4.6 per cent over the past year, compared to a 5.1 per cent rise in the middle market and a 5.7 per cent rise across the most affordable suburbs. The annual rate of growth is generally trending higher across each segment.
Adelaide’s most expensive suburbs saw values rise 3.2 per cent, compared to a 3.1 per cent increase across the middle market and a 2.9 per cent increase across the most affordable suburbs.
“Across each segment growth is fairly steady with the rate of capital gain holding reasonably firm over the past twelve months.”
Perth is the only major capital to have seen value falls over the past year, with prices down across each segment: by 0.5 per cent in the low end of the market, by 1.5 per cent across the middle of the market and by 2.1 per cent in the most expensive suburbs.
Melbourne continues to lead Australian property price growth
5th April 2016
Melbourne continues to lead house price growth in Australia, according to new figures from CoreLogic RP Data.
Melbourne remains the capital city with the strongest annual growth, with dwelling values increasing by 9.8 per cent over the past twelve months.
However, the country’s real estate markets are slowing down. Annual rate of capital growth across the capital cities has now reached its lowest point in 31 months, with dwelling values rising by 6.4 per cent over the past 12 months across the combined capitals. Furthermore, no Australian capital city has recorded an annual growth rate in the double digits over the past twelve months.
During March, capital city dwelling values recorded a subtle lift, rising by 0.2 per cent to take capital city home values 1.6 per cent higher over the first quarter of 2016. The quarterly increase in home values was broad based across the nation’s capitals, with Perth and Brisbane the only two cities to record negative movements in dwelling values over the past three months. of -0.9 per cent and -0.1 per cent respectively.
CoreLogic RP Data Head of Research Tim Lawless comments: “The March quarter rise in capital city dwelling values is in stark contrast to the first quarter of 2015, when values increased by 3 per cent, which is almost double the current pace of quarterly growth. However, compared with the final quarter of 2015, when capital city dwelling values were down 1.4 per cent, the housing market has shown a modest rebound in growth which is well below the strong capital gains recorded over the first half of 2015.”
“The housing market has been losing momentum since July last year, when capital city dwelling values were increasing at the annual rate of 11.1 per cent,” he adds.
Melbourne overtakes Sydney to become hottest Australian housing market
2nd February 2016
Melbourne has overtaken Sydney to become Australia’s hottest housing market. The harbour city has dominated price growth in recent years, as values race ahead of the rest of the country. Now, though, Melbourne has stolen the spotlight.
Sydney dwelling values reduced 0.6 per cent between July last year and the end of January 2016, according to new figures from CoreLogic RP Data. Over the same period, Melbourne enjoyed a 3 per cent rise in prices.
The striking shift in momentum is partly due to Sydney’s overheated market beginning to cool.
Indeed, the last six months saw both Brisbane and Canberra dwelling values rise a comparitively fairer 2 per cent, with Hobart house prices also climbing 1.3 per cent. (Adelaide’s remained flat on 0.1 per cent.)
On an annual basis, Sydney values jumped 10.45 per cent, behind Melbourne’s 11 per cent, but also far below its peak of 18.4 per cent (recorded in July 2015). After months of progressively softening, Sydney’s rate of annual growth is now at its lowest in over two years.
On a quarterly basis, meanwhile, Sydney saw values fall 2.1 per cent, the largest of the cities. While Darwin and Adelaide saw prices dip 1.4 percent and 0.9 per cent respectively, Hobart saw prices climb 3 per cent. Melbourne saw values remain steady with a slight slip of 0.1 per cent.
Hobart also led the monthly figures in January 2015, with a 4.7 per cent jump in values, followed by Melbourne with a 2.5 per cent hike in values and Canberra with a 2.8 per cent lift. Sydney prices showed a rise of 0.5 per cent, while the remaining four capital cities showed dwelling values to be either flat or down.
Melbourne has been the most resilient to slowing growth conditions, says head of research Tim Lawless, which has helped the tables to turn between the two heated rivals.
“Previously, during the height of the growth phase, there was a large separation between Sydney’s housing market, which was streaking ahead, and Melbourne’s, where the rate of capital gain was substantial but still well below the heights being recorded in Sydney. The latest data reveals Sydney’s housing market is now playing second fiddle to Melbourne’s, at least in annual growth terms.”
The news arrives as the Australian government increasingly cracks down on illegal foreign investment in the country’s real estate, something that has primarily focused on Sydney’s market. While investment activity is now slowing, Lawless notes that this is also a side effect of the price rises, which are impacting yields for investors.
“With dwelling values rising substantially more than rents in Sydney and Melbourne, this ongoing effect has created a compression in gross rental yields to the extent that gross yields in these cities are now only marginally higher than record lows,” explains Lawless.
According to the most recent Reserve Bank’s private sector housing credit data, the pace of investment-related credit growth has fallen well below the 10 per cent speed limit implemented by APRA in December 2014.
“As housing market activity moves out of its seasonally slow festive period, we are likely to have a much better gauge on how the overall housing market is performing in the New Year,” he comments.
Nonetheless, property prices in the two capital cities are still on the up, with Sydney remaining number one in terms of pure price: the city’s median house price is $776,000, above of Melbourne’s $595,000. As price hikes Down Under are increasingly driven by more affordable Melbourne, investors seeking capital growth are likely to follow suit.Google+