Key Summary
Sydney and Melbourne, the nation’s two hottest capitals regarding property values, cooled over April. Capital city dwelling values rose by just 0.1% across the capitals over the month. This increase was the lowest since December 2015.
However, since the last Reserve Bank rate cut – August 2016 – capital city dwelling values rose by 10%. Both Sydney and Melbourne made gains of around 13% since this time. Property growth consistently grew, along with investment. So, the fact April shows signs of slowing may indicate the market is peaking.
Capital City Home Values at 30th April 2017 |
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| All Dwellings | Houses | Units | ||||
| City | % Change Mth-on-Mth | % Change Year-on-Year | % Change Mth-on-Mth | % Change Year-on-Year | % Change Mth-on-Mth | % Change Year-on-Year |
| Sydney | -0.04 | 16.04 | 0.19 | 17.40 | -1.19 | 9.82 |
| Melbourne | 0.50 | 15.27 | 0.64 | 16.52 | -0.91 | 4.12 |
| Brisbane | 0.62 | 2.06 | 0.99 | 2.59 | -3.13 | -3.14 |
| Adelaide | 0.78 | 2.15 | 0.87 | 2.35 | -0.27 | -0.19 |
| Perth | -0.96 | -6.03 | -0.90 | -6.04 | -1.75 | -5.89 |
| Darwin | 0.50 | -2.29 | 1.27 | -2.78 | -2.43 | 0.26 |
| Canberra | -2.76 | 8.39 | -3.05 | 8.73 | 1.72 | 3.76 |
| Hobart | 0.95 | 13.59 | 0.43 | 13.26 | 6.25 | 17.23 |
Source: CoreLogic RP Data
Although, economists suggest the softer housing market comes after several rate hikes by lenders since September 2016. It’s also noted that this change is despite the official cash rate remaining stable. According to Reserve Bank data, the average discounted variable rate investor mortgage edged 25 basis points higher, since August 2016. Subsequently, this is equivalent to a Reserve rate hike.
Despite this, median dwelling values rose across all capitals. Since November 2016, Sydney home values rose by $60,000; Melbourne by $50,000; Brisbane by 11,000; Perth by $10,000; Darwin by $2,000; Canberra by $37,000; and Hobart by $19,700.
Capital City Home Values October 2016 |
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| All Dwellings | |||||
| City | % Change Year On Year | % Change Month On Month | % Change Qtr. | Total Gross Returns | Median Dwelling Values |
| Sydney | 16 | 0.0 | 4.0 | 19.6 | $860,000 |
| Melbourne | 15.3 | 0.5 | 3.9 | 18.6 | $650,000 |
| Brisbane | 2.1 | 0.6 | 0.5 | 6.4 | $481,000 |
| Adelaide | 2.2 | 0.8 | 1.8 | 6.3 | $430,000 |
| Perth | -6.0 | -1.0 | -2.4 | -2.5 | $472,000 |
| Darwin | -2.3 | 0.5 | -0.9 | 2.6 | $467,000 |
| Canberra | 8.4 | -2.8 | 1.8 | 12.9 | $605,000 |
| Hobart | 13.6 | 1.0 | 5.1 | 19.6 | $363,200 |
| Combined Capitals | 11.2 | 0.1 | 2.9 | 14.9 | $625,800 |
Source: CoreLogic RP Data
Softer Results Analysis
Dramatic capital gains recorded across Australian markets, particularly in Sydney and Melbourne. Between July 2016 and March 2017, Sydney dwelling prices rose by 11.3% in value and Melbourne’s by 12.6%.
Hobart has been the strongest performer over the last quarter, based on quarterly change. As a result, this city’s dwelling values rose by 5.1% over 3-months.
Nevertheless, economists caution that softer results over a month don’t indicate the market has peaked. April has coincided with Easter, ANZAC day, and school holidays, which traditionally denote a weaker period. Plus, auction rates are still strong.
Auction Rates
The combined capital city clearance rate rose to 76.9% in the closing week of April. Prior weekly clearance rates were at 69.8%, after a 10-week run at above 70%. Both Sydney and Melbourne have strong auction markets.
In the closing week of April, 804 properties auctioned in Sydney, with a clearance rate of 78.4%. Nonetheless, in comparison, 12-months ago, 818 properties auctioned with a 71.7% clearance rate.
Melbourne, on the other hand, auctioned 1,232 properties in the closing week of April. Over this time, this city had a clearance rate of 75.2%. Twelve months ago, 1,404 properties auctioned, but the clearance rate was 73.5%.
Auction Clearance Rates Week Ending 1 May 2017 |
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| All Dwellings | |||
| State | Clearance Rate | No. Scheduled Auctions | Sold at Auction |
| Melbourne | 79.9% | 1232 | 1087 |
| Sydney | 74% | 804 | 630 |
| Brisbane | 70% | 124 | 87 |
| Adelaide | 65.4% | 82 | 53 |
| Perth | 39% | 33 | 13 |
Source: CoreLogic RP Data
