National home prices gained ground once again last month, but the multispeed market is showing signs of diverse results.
Few would have imagined after the national housing market was in the doldrums just 18 months back, that property prices would be on the march higher ever since.
That’s right, July marked the 18th consecutive month where the CoreLogic national Home Value Index (HVI) increased.
Last month, the Index grew by 0.5%, which although slightly less than the preceding month, when house prices advanced 0.7%, illustrates that the market remains firmly in an upswing.
Since national dwelling values bottomed, the key Index has jumped almost 14%, with the national market at a record high.
In light of the result, at the end of July the median dwelling value across the nation was $798,207. That is approximately $4,500 more than this time a month ago.
However, while the key mid-size markets leading the charge are still performing strongly, there are also some signs that momentum within the market is beginning to moderate.
For example, over the last three months, house prices are up 1.7%. During that period, three capital cities recorded a decline in house prices. On the other hand, growth in the 12 months through to July, which feeds in other quarters with faster growth, is running at a higher rate of 7.6%.
By way of comparison, across the same three-month timeframe last year, dwelling values recorded a 3.2% increase.
Across the country, the issue of affordability and borrowing capacity has tilted demand to the lower quartile of the market.
This segment of the market is pacing the market’s growth in every capital city bar Canberra and Darwin. Adding to this, unit prices are also growing at a faster rate than houses in the same band of cities.
In terms of supply, the market is still vulnerable by way of a shortfall in new builds. Dwelling approvals slumped -6.5% through June, which is a major challenge for policy makers.
With inflation data at the end of July likely offering some respite from the prospect of a resumption in the Reserve Bank of Australia’s rate hike campaign, it remains to be seen what this will do for sentiment across the broader economy, including the property market.
Capital Cities: Review
Once again, the heavy lifting was left to Perth, Adelaide, and Brisbane, where the trio posted monthly gains of 2.0%, 1.8%, and 1.1% respectively.
This trend is in stark contrast with the rest of the country, and underscores the extent of the multispeed market at this time.
For further context, Perth property values were tracking at a quarterly rate of growth of 6.2%, with Adelaide and Brisbane tracking at 5.0% and 3.8% respectively.
In the case of Adelaide, that is the fastest rolling quarterly pace of growth in over two years. The median dwelling value in Brisbane surpassed that of Canberra, leapfrogging the nation’s capital to become the second most-expensive city across Australia.
In Sydney, dwelling values increased through July, but at a much more sedate pace of 0.3%.
However, one of the major stories for the month was the result in Melbourne, where dwelling values declined by -0.4%. As a result, that ensured the city’s quarterly price growth remained firmly in the red, while annual growth was effectively flat, sitting at just 0.2%.
The Melbourne property market has been influenced by a number of state government policies that may have dampened enthusiasm among the investor cohort.
Rounding things out, Canberra dwelling values were flat through the month, in Darwin they declined by -0.2%, and Hobart fared the worst, with house prices sliding -0.5%.
Aside from state-specific policies in Victoria, one of the differentiating factors between these markets is advertised supply at this time.
In the likes of Perth, Adelaide, and Brisbane, the volume of homes for sale is over 30% below the seasonal average for this time of the year. In Melbourne, and even Hobart for that matter, supply is sitting well above seasonal highs.
At the end of July, median dwelling values across the major cities were as follows:
Sydney: $1,174,867
Brisbane: $873,987
Canberra: $870,910
Melbourne: $781,949
Adelaide: $776,597
Perth: $773,335
Hobart: $646,863
Darwin: $507,097
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