Data released yesterday revealed an acceleration in the recovery of housing values across August, with Sydney and Melbourne charting the sharpest increases.
The CoreLogic August home value index results showed that national dwelling values increased by 0.8% over the month, the first monthly increase since October 2017.
“Our expectation has been that this recovery would be a slow and steady one, however, with housing credit restrictions easing and mortgage rates likely to reduce further, this rebound could potentially turn into a ‘v-shaped’ recovery,” said CoreLogic research director Tim Lawless, who elaborated on the strength of the August numbers for Sydney and Melbourne.
“Throughout 2019, up until August, we were seeing fairly consistent, moderate change in values trending downwards from month to month. Then we saw values rise, but very subtly – less than half a percent – in June and July.
“To now see values rise much more sharply in the month of August, up around 1.5% in both those cities, it’s a real step change upwards in the recovery trajectory,” he explained.
Housing values increased across five of the eight capitals over the month, but slipped lower in Adelaide, Perth and Darwin. However, the three-month trend in those cities suggested an improvement in the rate of decline.
The combined regional market values have continued to trend lower, down -0.6%.
July housing credit data revealed a sizeable 0.5% increase in credit to owner-occupiers, the strongest month on month rise since September 2018. While inventory levels remain lower than a year ago, newly advertised stock levels are also increasing, according to the August data.
Lawless noted that it’s an opportune time for prospective buyers looking to upgrade into a larger, more expensive property to take action.
“When you consider that interest rates have not been this low since the 1950s, credit has just opened up a little bit, housing prices are more affordable now than they were a couple of years ago, there’s a broad range of groups in the housing market that are benefiting from the current environment,” he said.
“The top quartile of the market recorded the largest decline and now it’s recording the largest upswing as well. Potentially, you could buy into that upper quartile marketplace for a substantially lower amount than you would a few years ago.”