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Dwelling values nationwide have slowed down, with values rising just 0.4 per cent in the last three months, according to the CoreLogic May Home Value Index.
Australia’s property market has entered a cooling period, with the CoreLogic May Home Value Index showing minimal change over the last quarter.
The capital cities recorded a rise of just 0.4 per cent for May. CoreLogic’s head of research Tim Lawless described May as a ‘seasonally weak’ month. Month-on-month dwelling value recorded a fall of -1.1 per cent, attributed mainly to declines in Sydney and Melbourne.
“The May home value results should be viewed in the context of demonstrated seasonality. Values have fallen during May in four of the past five years. Reading through the seasonality indicates that value growth in the market has lost momentum, particularly in Sydney and Melbourne where affordability constraints are more evident and investors have comprised a larger proportion of housing demand,” Mr Lawless said.
“The past three months has seen capital city dwelling values rise by a modest 0.4 per cent, with four of the eight capitals recording a fall. Over the past three months, Sydney dwelling values are unchanged while Melbourne values have increased by 0.7 per cent.
“The trend in growth rates across the smaller capital cities was mixed, with dwelling values across Brisbane and Adelaide continuing to inch higher while values in Perth and Darwin showed further easing over the most recent rolling quarter. A steep drop in the Hobart index has reversed the gains recorded over the previous quarter and the Canberra index was also -1.5 per cent lower over the past three months.”
Houses and units both recorded small decreases in dwelling values. Dwelling values for houses in May recorded a fall of -0.9 per cent, but were up 0.9 per cent for the quarter, while units for the month had a fall of -2.6 per cent, and also fell for the quarter at -2.9 per cent.
Regardless of the dwelling value falls, rental yields for both houses and units were up nationwide at 3.1 per cent and 4.1 per cent respectively.
Mr Lawless said APRA announcements to slow the pace of interest-only lending, rising mortgage rates, a general reduction in market activity, moderating auction clearance rates, rising advertised stock levels and lowered consumer confidence – as measured by Westpac and the Melbourne institute – are responsible for making forecasting the market beyond May difficult.
“In particular, the Westpac ‘time to buy a dwelling index’, fell 6.5 per cent over the month. According to Westpac, ‘consumer sentiment towards housing shows an increasingly negative view’,” Mr Lawless said.
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