Housing recovery gathers momentum
First month of spring sees more gains, nationwide home value is up 1.7 per cent but still down on 2017 high
THE housing market has made further progress towards a recovery, with CoreLogic’s national home value index recording the third consecutive month of gains, lifting the national value of housing by a cumulative 1.7 per cent since the market found a floor in May 2019.
The month-on-month lift of 0.9 per cent in national housing values was the largest monthly gain since March 2017.
CoreLogic head of research Tim Lawless said that although housing values are now consistently tracking higher, at least at a macro-level, the national index remains 6.8 per cent below the October 2017 peak, indicating that buyers still have some time to take advantage of improved housing affordability before values return to record highs.
The September gains were once again driven by stronger conditions emanating from Sydney and Melbourne where dwelling values increased by 1.7 per cent over the month; Australia’s two largest cities have seen a rapid bounce-back in home values over the past two months, with Sydney up a cumulative 3.3 per cent and Melbourne up 3.2 per cent in August and September.
Housing values remain 11.9 per cent below their July 2017 peak in Sydney and 7.9 per cent below Melbourne’s November 2017 peak.
Brisbane (+0.1 per cent) and Canberra (+1.0 per cent) were the only other capital cities to record a rise in dwelling values over the month, while values held firm in Adelaide but fell in Hobart (-0.4 per cent) and continued their long run of losses in Perth (-0.8 per cent) and Darwin (-0.2 per cent).
Most of the regional markets recorded a rise in September, with regional SA (-0.5 per cent) and regional WA (-1.3 per cent) the only ‘rest of state’ areas to record a drop in values.
Mr Lawless believes that the strong rebound in Sydney and Melbourne housing markets relative to other regions, can be attributed to a variety of factors.
“While all regions are benefitting from low mortgage rates and improved access to credit, economic and demographic conditions in New South Wales and Victoria continue to outperform most areas of the country,” Mr Lawless said.
“Population growth is higher, unemployment is lower and jobs growth is stronger, providing a solid platform for housing demand.”
Another factor cited by Mr Lawless as driving the strength in Sydney and Melbourne property markets could be higher levels of investor participation.
The latest housing finance data from the ABS to the end of July shows investors comprised 32 per cent of mortgage demand across New South Wales and 26 per cent of Victorian mortgage demand which is higher relative to any of the states or territories.