Housing value growth continued to ease back in June, new figures show.
CoreLogic’s national Home Value Index (HVI) recorded a second consecutive monthly decline in June, down 0.6% to be 0.2% lower over the June quarter.
Falls in Sydney and Melbourne (down 1.6 and 1.1% respectively in June) were the primary drivers of the month’s steeper drop, but values were also down (0.2%) in Hobart and regional Victoria.
Australia’s third largest city, Brisbane, has seen value growth flatten out to just 0.1% in June, while Adelaide (up 1.3%) remains the only capital still recording a monthly growth rate higher than 1.0%.
Perth, which was temporarily showing a second wind as state borders reopened, is again losing steam with values up 0.4% in June.
The combined regionals index remained in positive growth territory in June, albeit slightly, rising 0.1%, reducing quarterly growth from a peak of 6.6% in April last year, to 2.0% over the three months to June.
CoreLogic Research Director Tim Lawless observed that after a long period of being outperformed by houses, unit markets are now holding their value a little better than houses across the largest capitals.
“Since the onset of the pandemic in March 2020, capital city unit values have risen 9.8% compared to 24.7% for houses, resulting in better affordability across the medium to high density sector”, Lawless said.
“As housing conditions slow, we are seeing the market swinging back in favour of buyers”, he added.
“While national advertised stock levels remain 7.4% lower relative to 2021, in Sydney and Melbourne, where housing conditions are the weakest, total advertised supply is now 7-8% above the levels recorded a year ago and well above the five-year average.
“Hobart has seen advertised stock levels jump 48.4% higher relative to last year and inventory is 20.7% higher in Canberra.
“In Adelaide, where housing conditions remain quite strong, advertised stock levels are still 16.9% lower than last year and almost 40% below the five-year average. Brisbane (down 14.9%) and Perth (16.2%) are also showing low advertised stock levels relative to this time last year.”
Interestingly, Lawless is not seeing any signs of panicked selling as housing conditions cool.
“In fact the trend is the opposite, with the flow of new listings to the market slowing”, he said.
CoreLogic estimates home sales nationally through the June quarter were 15.9% lower than a year ago, but are still 13.0% above the previous five-year average.
Rental markets remain extremely tight around the country, with rents now consistently rising at a faster rate than housing values.
Nationally, rents increased 0.9% in June, taking the annual growth rate to 9.5%. This is the highest annual rate since December 2007 when record levels of overseas migration pushed demand higher.
After bottoming out at a record low of 3.21% in the first two months of 2022, the average gross yield has increased to 3.33%.
“With rental markets expected to remain tight, it is likely rents will continue to outpace growth in housing values, driving a rapid recovery in rental yields”, Lawless concluded.
