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After a tough couple of years for agents in capital city markets, fresh data shows a price jump in most capital city markets.
The recent price downturn in Australia’s capital city markets is the biggest in 30 years. As of June this year, prices had fallen nationally by an average of 10.1 per cent since their peak in 2017. Sydney and Melbourne drove that average up, falling by 14.9 per cent and 11.1 per cent, respectively.
The knock-on impact for agents has been palpable, particularly in parts of Sydney and Melbourne that have had large new development projects. These include in areas like Sydney’s south-west and north-west, and in Melbourne along key arterial roads.
However, fresh figures from CoreLogic show that most capital cities recorded a slight price rise in June, ahead of a predicted steady price rise beginning from the end of the year.
How key markets performed
Over June, Darwin recorded the sharpest monthly increase, with values rising by 0.4 of a percentage point. This was followed by Hobart, where values increases by 0.3 of a percentage point.
Sydney, Melbourne and Brisbane each recorded monthly spikes of 0.2 of a percentage point.
Dwelling values declined in the remaining cities: Perth, Adelaide and Canberra. They declined by 0.5 of a percentage point, 0.3 of a percentage point and 0.2 of a percentage point, respectively.
Slow recovery on the cards
Despite the green shoots, CoreLogic’s head of research, Tim Lawless, predicts a slow and steady recovery. His projection is based on market conditions including the responsible lending practices being put into action in Australia’s banks.
“Housing credit policies remain much tougher than they were prior to the [banking] royal commission as lenders continue to move away from the Household Expenditure Measure (HEM) and examine borrower spending behaviours and expenses more closely,” Mr Lawless said.
“Also, lenders now have the benefit of comprehensive credit reporting whereby borrower debt profiles are more transparent, providing lenders with the ability to assess creditworthiness in more detail.
“The ongoing tightness in housing credit is expected to keep a rapid rebound in housing values at bay, despite the lowest mortgage rates since the 1950s.”
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