While seven of Australia’s capital cities recorded growth in home values over the month of November, a one per cent drop in Melbourne managed to offset the gains of the other capital cities on a national basis.
According to the latest RP Data Rismark Home Value Index, overall property values rose 0.4 per cent across the first two weeks of November, only to finish flat at the end of the month.
Melbourne’s one per cent drop in home values ultimately negatively impacted all of the other capital cities.
The strongest performer over the month of November across the major capital cities was Perth, where improving housing market conditions were evident with values up one per cent.
Brisbane and Adelaide values each increased by 0.5 per cent while Sydney values rose by just 0.1 per cent.
On a quarterly basis, most capital cities recorded a rise in dwelling values. The largest capital gains were found in Darwin, which recorded 3.1 per cent growth and Perth, which recorded three per cent growth.
On an annual basis, Sydney recorded good growth of 1.3 per cent, while Brisbane recorded 0.3 per cent growth.
The largest fall over the past 12 months to the end of November was recorded in Hobart, where dwelling values are down seven per cent.
According to RP Data senior research analyst Cameron Kusher, the November market conditions highlight that the road to a market recovery will not be without pauses, and those cities that performed very strongly in 2009 and 2010, like Melbourne, may show continued weakness.
“Capital city home values remain 5.6 per cent lower than their historic highs of 15 November 2010, but up two per cent from their low of late May 2012,” he said.
“Home values in Brisbane and Perth remain below where they were five years ago whereas the other mainland cities have all increased over this period.
“This has meant that relative to the other capital cities, Brisbane and Perth have experienced affordability improvements and, subsequently, we may see them become more popular from both an owner occupation and investment perspective.”
Rismark International chief executive, Ben Skilbeck, said with the recent sharp improvement in consumer sentiment showing optimists now outweigh pessimists, house price to income ratios back at 2003 levels, and meaningful recent housing affordability gains, it will be interesting to see the impact on the housing market if interest rates are further cut in December, as widely anticipated.
“Given the historically weak seasonal month of December, if rates are cut in December, it’s likely we’ll have to wait until early in the New Year to see the housing market response,” he said.