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Melbourne takes over as the best performing capital city over the past twelve months

Posted on 3 February 2016

Source:  CoreLogic

The recent growth conditions have pushed the Melbourne market into first place for annual growth in dwelling values with an 11.0% rise compared with Sydney where values are 10.5% higher over the past twelve months.

According to the January 2016 CoreLogic RP Data Hedonic Home Value Index results released today, dwelling values across Australia's combined capital cities showed a 0.9 per cent rise in January after recording no change in December and a 1.5 per cent drop in November.

 Change in Dwelling Values  
RegionQTRYOYMedian Dwelling Price
Sydney -2.1% 10.5% $776,000
Melbourne -0.1% 11.0% $595,000
Brisbane 0.8% 2.8% $478,200
Adelaide -0.9% 1.1% $420,200
Perth 1.7% -4.1% $515,000
Hobart 3.0% 2.3% $332,500
Darwin -1.4% -2.5% $520,000
Canberra 1.2% 6.0% $587,500


The rolling quarterly trend was looking similarly diverse, with four of Australia's eight capital cities recording negative dwelling value movements over the past three months, with Sydney dwelling values showing the largest fall, down 2.1 per cent.

Despite recording the largest annual decline in home values (-4.1%), Perth dwelling values posted a 1.7 per cent rise over the three months to the end of January. Other capital cities to record a rise over the rolling quarter were Brisbane (+0.8%) and Canberra (+1.2%).

"Melbourne's housing market has been more resilient to slowing growth conditions which has propelled the annual growth rate to the highest of any capital city, with dwelling values 11.0% higher over the past twelve months.

"In fact, over the past six months, the performance gap between Sydney and Melbourne is stark. Sydney dwelling values have reduced by 0.6 per cent between July last year and the end of January 2016, compared with a 3.0 per cent rise across Melbourne dwelling values. The last six months have also seen both Brisbane and Canberra dwelling values rise by 2.0 per cent while Hobart values are 1.3 per cent higher and Adelaide dwelling values have been virtually flat with a 0.1 per cent rise," Mr Lawless said.

While the pace of growth in dwelling values across the combined capitals has eased from the heights of mid last year, rental growth across the capital cities over the past twelve months has reduced further, with dwelling rents unchanged over the year.

According to Mr Lawless, these are the weakest rental markets conditions ever seen. "In fact there hasn't previously been a twelve month period when rents didn't rise across our combined capitals index." he says.

Dwelling rents were down in Brisbane (-0.7%) and Adelaide (-0.4%). The largest rental increases were in Sydney and Melbourne where weekly rents rose 1.4% higher, and 2.1% higher respectively over the past twelve months.

Mr Lawless said, "The slower pace of investment credit is likely to be due to more than just higher mortgage rates for investment loans and stricter lending policies, but also due to investors becoming wary of the low rental yield scenario while also anticipating lower capital gains than what was recorded last year."


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