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Capital city home values are trending higher, proving a lower mortgage rate environment is helping the market, according to RP Data’s weekly Property Market IndicatorSummary report.
However, not all the capital cities are following the same trend, with Brisbane and Adelaide recording negative changes on a weekly basis. Adelaide, in particular, has recorded a drop in both monthly and yearly comparisons.
“Brisbane and Adelaide are two of the more affordable major capital cities and they are not really responding as strongly to the low interest rate environments as some of the more expensive cities,” said senior research analyst for RP Data Cameron Kusher.
“I think it’s just a case of them being a little bit behind the capital cities. Obviously, the Queensland markets have had a pretty tough run over the last six or seven years, but the gap between prices in Brisbane, Sydney and Melbourne, which has often been the driver of the Brisbane housing market has really widened quite a lot over the last couple of years, so I think in Brisbane, for example, it’s just a bit behind in the cycle."
Values in Brisbane were at levels last seen in 2007 despite a pick-up in sales activity, which the market normally responds to over time.
Mr Kusher said there were a number of factors contributing to the slower activity in Adelaide.
“The slowing down of the manufacturing sector probably impacts Adelaide, and some of the mining projects not going ahead is probably having an effect on the housing market as well," he said.
“You’ve got a lower level of employment participation so a greater number of retirees in South Australia, and that’s probably having an impact as well. Population growth in South Australia is nowhere near as strong as it is in Sydney, Melbourne, Brisbane and Perth.”
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