Capital city dwelling values reach ‘new record highs’
Dwelling values have continued to rise across five of the eight capital cities in the quarter ended October 2016.
According to the CoreLogic October Home Value Index, every capital city apart from Adelaide (-1.3 per cent), Hobart (-2.8 per cent) and Perth (-1.5 per cent) recorded a rise in median dwelling price values over the past three months, with Canberra leading the charge (+5.6 per cent).
CoreLogic research director Tim Lawless commented: “The strong conditions across the Canberra market are largely related to rising house values, with unit values increasing at less than half the pace of detached housing.”
Melbourne followed close behind with an increase of 4.6 per cent q/q in dwelling values to $600,000, Darwin by 4.0 per cent to $465,500, Sydney by 2.9 per cent $800,000 and Brisbane by 1.3 per cent to $470,000.
Overall, dwelling values rose across the capitals by a combined 2.7 per cent over the quarter.
Mr Lawless noted that detached housing is generally “outperforming” the unit sector (in most other markets apart from Sydney) due to concerns around the higher number of units available for sale in the market.
According to Mr Lawless, the divergence in performance between houses and units is most clearly evident in Brisbane.
“The weaker performance of unit values across the Brisbane market may be partially attributed to supply concerns, as unit supply levels across key regions of Brisbane’s inner city show the potential for a significantly larger relative increase in existing stock levels when compared with Melbourne and Sydney,” he explained.
Auction results another sign of market strength
Mr Lawless also pointed to the capital cities’ auction clearance rates as an indication of the strength of the capital cities’ markets, which combined have been tracking in the mid to high 70 per cent range.
According to the Index, clearance rates across Sydney have dipped below 80 per cent only once in the past two months.
Further, the Index highlighted that a year ago auction clearance rates were consistently trending around the mid-60 per cent range.
Mr Lawless commented: “The strong housing market growth results are continuing to occur on a back drop of low stock levels and low transactional activity.”