Home Values Increasing Although Pace Slows
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 per cent in July, according to CoreLogic’s monthly national home value index.
The latest rise means values are now 14.1 per cent higher over the first seven months of this year and 16.1 per cent higher over the past twelve months. Values lifted in all capital cities, with Canberra on 6.6 per cent showing the highest gain. Brisbane and Sydney followed with a rise of 2.0 per cent, then Adelaide, Hobart and Darwin all with matching gains of 1.7 per cent. Melbourne values were up 1.3 per cent, while Perth fared less strongly with a rise of just 0.3 per cent.
Growth has slowed across each of the capital cities. Sydney recorded the sharpest reduction, with its monthly capital gain falling from 3.7 per cent in March to 2.0 per cent in July.
Tim Lawless, CoreLogic’s Research Director, 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. 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 per cent above the five-year average, while active listings remain about 26 per cent below the five-year average. Lawless suggests the mismatch between demand and advertised supply will remain a key factor, placing upwards pressure on housing prices.
Source: EPS Property Search