Australian housing market weaker outside of larges cities, latest index suggests

Taylor Scott International News

Residential property values across Australia’s capital cities increased by 1% over the month of October, according to the latest RP Data CoreLogic index. The data highlights that despite a slowdown in growth in September, values continued to rise, increasing by 2.2% over the past three months. Although combined capital city home values were up by 1% not all cities saw increases. Only Sydney with an increase of 1.3%, Melbourne up 1.9% and Brisbane at 0.6% actually recorded value rises over the month. According to Tim Lawless, head of research, this result highlights weaker housing market conditions outside of Australia’s largest cities. Looking over the past three months Sydney, Melbourne, Brisbane and Adelaide, which happen to be four of the five largest capital cities, were the only capital cities to record an increase in home values. Sydney leads the growth with home values increasing at a rate of more than 1% a month, up 3.9% over the past three months. Lawless said that Perth and Canberra have clearly moved through the peak of their growth cycles. However, the greatest value falls over the last three months were recorded in Hobart with a decline of 2.8% and Canberra where values were down 2.4%. ‘Looking at the increase in home values over the 12 months to October, it is clear that the rate of capital growth is continuing to moderate. Despite the annual rate of value growth slowing, all capital cities have still recorded an increase in home values over the past year,’ said Lawless, He pointed out that home values across the combined capital cities have increased by 8.9% over the 12 months ending October 2014, which has slowed from a peak of 11.5% in April of this year. Sydney, and to a lesser degree Melbourne, continued to be the main drivers of the increase in home values. Over the past year, Sydney home values were 13.1% higher, while Melbourne values were up 8.9%. Brisbane was the third best performing capital city for value growth over the year with values up 5.6% followed by Darwin where values rose by 5%. Elsewhere, value growth was more subdued with increases of 3.4% in Perth, 4.3% in Adelaide, 4.4% in Hobart and 0.9% in Canberra. ‘Despite the fact that the annual increase in home values is slowing, other indicators remain strong,’ added Lawless. Auction clearance rates continued to hover around the 70% mark week to week while volumes across RP Data real estate agent and valuation platforms remained strong which is indicative of heightened levels of industry and mortgage market activity. The number of new properties listed for sale continues to rise as are total listing numbers. However, Lawless said that the fairly rapid rate of sale is resulting in a slower increase in total listings than new listings. Conditions across capital city rental markets remained subdued, with weekly rents rising by only 1.8% over the past 12 months, the lowest annual change in capital city rents since the year ending August 2003. According to Lawless, the consistent… Continue reading →

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