Despite a solid increase during August, figures from CoreLogic show the growth of dwelling values in Australia continues to cool.
According to CoreLogic’s August Hedonic Home Value Index, the combined capital median house price in Australia sat at $567,000 at the end of August, up 1.1% over the month.
In the three months ending August, the combined capital city median dwelling value increased 2.4%, however CoreLogic research head Tim Lawless said price growth is in a downward trend.
“Despite a strong month-on-month reading, the pace of annual capital gains has trended lower compared with the 2015 peak in growth conditions, when capital city dwelling values were rising at 11.1% per annum,” Lawless said.
“The most recent twelve month period has seen dwelling values rise by a lower 7% per annum.”
Sydney and Melbourne remain the premier markets for price growth, with their median dwelling prices of $780,000 and $576,000 having increased by 9.4% and 9.1% respectively over the past 12 months.
“The rate of annual growth in Sydney has virtually halved from a recent 18.4% peak to the current annual rate of 9.4%. Similarly, in Melbourne the annual growth trend peaked at 14.2% per annum last year and has since tracked back to 9.2% per annum over the most recent twelve month period,” Lawless said.
Behind Sydney and Melbourne, Canberra and Hobart were the best performers in the year to August, registering yearly growth of 7.6% and 6.5% respectively.
Perth and Darwin continued their run as the nation’s worst performers, with both recording price falls of 4.2% in the year to August.
While overall the rate of growth is slowing across the combined capital cities, there may be more bad news for those looking to break into the property market as the nation’s cheapest suburbs outperform the rest.
“Looking at housing market performance across the broader value segments over the past 12 months, the most affordable suburbs have recorded the greatest value rises, while the most expensive suburbs have seen a more moderate rate of growth,” Lawless said.
According to the CoreLogic Stratified Hedonic Index, the most affordable quartile of capital city suburbs recorded a value rise of 10% over the past year, compared to 7.4% growth across the broad middle of the market and a 6.2% gain across the most expensive quartile.
CoreLogic’s figures show that nationally in the three months to August settlements were 15 % lower than over the corresponding period last year, while in the capital city markets settlements are 17.1% lower.
With listings likely to increase in as spring rolls on, Lawless said coming months will indicate the real strength of the Australian market.
“Recently, new listing numbers have started to trend higher, which is normal for this time of year as vendors look to take advantage of the warmer weather during spring. Higher listing numbers will provide a timely test of the housing markets strength and whether more stock will be matched with a higher rate of absorption.”