Home values continued to trend upward in July despite a decline in some capital cities, property data analysts Corelogic announced this week.
Corelogic’s home value index (HVI) shows that national home values rose 0.5% in July. This is the 18th consecutive monthly increase, on par with the 0.5% increase recorded in June.
Following a 7.5% decline recorded between May 22 and Jan 23, the national HVI has gained 13.5% and values have consistently pushed to new record highs since November last year.
CoreLogic’s research director Tim Lawless said, however, that while the overall growth rate remains positive, it is apparent momentum is easing and conditions are becoming more diverse.
“Three capitals recorded a decline in values over the past three months. Melbourne led the decline with a 0.9% fall, alongside a 0.8% and 0.3% reduction in Hobart and Darwin values respectively”, Lawless noted.
“The rolling quarterly pace of growth has slowed markedly in Sydney to 1.1%, a fraction of the 5.0% quarterly gain recorded at the same time last year. These dynamics are weighing on growth in national home values, which are up 1.7% in the past three months compared to the 3.2% increase seen this time last year.”
The mid-sized capitals are continuing to buck the slowing trend, with the quarterly pace of growth in Perth tracking at 6.2%, while growth in Adelaide accelerated to 5.0%, the fastest rolling quarterly pace of growth since May 2022. Brisbane values rose at a quarterly pace of 3.8%, though this is down from a 4.7% increase seen this time last year.
Lawless believes that available supply is a key factor explaining the diverse outcomes in housing growth trends.
“The number of homes for sale in Brisbane, Adelaide and Perth is more than 30% below average for this time of the year, while weaker markets like Melbourne and Hobart are recording advertised supply well above average levels”, he noted.
The figures suggest that an erosion in borrowing capacity and affordability factors is skewing demand towards the lower price points of the market, with lower quartile values leading the growth trend across every capital city except Darwin and Canberra which are also the two most affordable capitals after adjusting for local incomes. At a combined capital city level, lower quartile dwelling values are up 3.3% over the past three months compared with a 0.8% increase in upper quartile values.
Units are now rising faster than houses across most of the capitals. The only exceptions over the past three months were Darwin and the ACT, where affordability pressures are less pressing and a history of higher supply levels across the medium to high density sector has been more apparent.
“Most cities now have a median house value that is at least 1.5 times higher than the median unit value. With stretched housing affordability, lower borrowing capacity and a lift in both investor and first home buyer activity, it’s not surprising to see the unit sector outperforming for a change”, Lawless concluded.
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