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Values up, though slowing

Growth might be slower, but housing values continue to rise at a rate well above average across most of the country, new data shows.

Values increased a further 1.6% in July, according to CoreLogic’s monthly national home value index.

The latest rise means values are now 14.1% higher over the first seven months of this year and 16.1% higher over the past twelve months.

Values lifted in all capital cities, with Canberra on 6.6% showing the highest gain. Brisbane and Sydney followed with a rise of 2.0%, then Adelaide, Hobart and Darwin all with matching gains of 1.7%. Melbourne values were up 1.3%, while Perth fared less strongly with a rise of just 0.3%.

CoreLogic’s research director Tim Lawless described the market as strong, but losing steam.

“The 16.1% lift in national housing values over the past year is the fastest pace of annual growth since February 2004; however, the monthly growth rate has been trending lower since March this year when the national index rose 2.8%”, he said.

Growth has slowed across each of the capital cities. Sydney recorded the sharpest reduction, with its monthly capital gain falling from 3.7% in March to 2.0% in July.

Lawless attributes the lower rate of growth in housing values to several factors.

“With dwelling values rising more in a month than incomes are rising in a year, housing is moving out of reach for many members of the community.

“Then, along with declining affordability, much of the earlier COVID-related fiscal support (particularly that related to housing) has expired”, he said, adding that it is nevertheless encouraging to see additional measures being rolled out for households and businesses as the latest COVID outbreak worsens.

“On the flip side, demand is being stocked by record low mortgage rates and the prospect that interest rates will remain low for an extended period of time.”

Home sales are tracking approximately 40% above the five-year average, while active listings remain about 26% below the five-year average.

Lawless suggest the mismatch between demand and advertised supply will remain a key factor, placing upwards pressure on housing prices.

The previously stronger performance across regional markets relative to the capital cities has normalised through 2021. After the combined regional areas of Australia recorded stronger housing market conditions through the second half of 2020, 2021 has seen an almost equal rate of growth in dwelling values across the combined regional and capital markets with values up 14.5% and 14.0% respectively.

About Adam Nobel

Principal
M. Bus, Grad Dip Adv, B.Int Bus, LREA

adam@hugoalexander.com.au

0417 007 001

Adam is the founder and Principal of Hugo Alexander Property Group. With a previous career in advertising, 20 years experience in property investment, and 14 years in Brisbane real estate, he knows the market inside out to ensure his clients grow their wealth faster.

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