National dwelling values nudged slightly lower in April, according to the latest home value index results released in early May.
CoreLogic’s monthly hedonic home value index shows the decline isn’t happening everywhere, though, but is instead concentrated within the largest capitals, while regional dwelling values edged 0.4 per cent higher.
Capital city dwelling values were 0.3 per cent lower over the month, driven by falls of 0.4 per cent in Sydney and Melbourne and a smaller decline in Brisbane values (down 0.1 per cent).
The falls were offset by flat conditions in Perth and subtle rises in Adelaide (up 0.1 per cent), Darwin and Canberra (both 0.6 per cent). Hobart was the only city where dwelling values rose by more than 1 per cent in April.
On an annual basis, the combined capitals recorded the first decline in dwelling values since late 2012, with values slipping 0.3 per cent lower, driven by falls in Sydney (3.4 per cent), Perth (2.3 per cent) and Darwin (7.7 per cent).
The only capital city to see an improvement in annual growth conditions relative to a year ago is Perth, where the rate of decline has slowed from -3.0 per cent last year to -2.3 per cent over the past twelve months.
CoreLogic head of research Tim Lawless commented that at a macro level, the latest trends are virtually the opposite of what we have become used to over the past five or so years.
“Regional areas are now outperforming the capitals and units are outperforming houses”, Lawless said. “Also, the most expensive properties are now showing weaker conditions than the more affordable ones.
“Despite the surge in unit construction over recent years, the past twelve months has seen unit values continue to trend higher, up 1.9 per cent, compared with a 1.0 per cent fall in house values.”
Capital city detached house values have recorded an average annual growth rate of 7.3 per cent over the past five years, while unit values were up 5.5 per cent per annum over the same period.
Understandably, it has been the more affordable housing stock that has shown resilience to value falls. Across the most expensive quarter of the market, dwelling values have increased at almost twice the pace of the most affordable quarter over the past five years, up 8.2 per cent per annum compared with 4.4 per cent per annum.
“As conditions have slowed down, it’s been the most affordable end of the housing market where values have remained resilient to falls, trending 1.9 per cent higher over the past twelve months while the most expensive quarter of properties has seen values fall by 1.6 per cent”, Lawless concluded.
Interested in more articles like this? Simply subscribe to our weekly newsletter here