Two-tiered housing market dynamics persisted over the first month of 2015, with strong gains recorded across Sydney and Melbourne, pushing capital city dwelling values 1.3 per cent higher.
The January CoreLogic RP Data Home Value Index results showed capital city dwelling values rose by 1.3 per cent over the first month of the year, indicating a strong start for the housing market in 2015.
While the headline reading is strong, overall housing market performance varied substantially between the capital cities. The largest cities, which have more influence over the combined capital city index due to the high number of dwellings, continued to push the aggregate index higher. Melbourne values were up 2.7 per cent over the month and Sydney values increased by 1.4 per cent. Hobart also recorded a strong monthly result with dwelling values up 1.6 per cent.
Three capital cities recorded a decline in dwelling values over the month, with Darwin values down 1.3 per cent, Adelaide recorded a 1.2 per cent decline, whilst Perth values were down 0.6 per cent over the month.
The quarterly change revealed a clearer picture for housing market conditions, with the combined capitals index recording a 1.9 per cent gain over the three months ending January.
While Sydney continued to be the standout for capital gains, the most significant increase in dwelling values over the past three months was recorded in Hobart where dwelling values moved 4.4 per cent higher, eclipsing the 2.4 per cent capital gain in Sydney, which was the second highest quarterly reading across the capitals.
According to CoreLogic RP Data Head of Research Tim Lawless, having Hobart produce the strongest results over the past quarter is certainly a unique occurrence.
“Generally, Hobart has recorded the lowest rate of capital gain since the onset of the GFC, however housing market conditions have been improving. Local economic conditions have been improving and Hobart homes are the most affordable of any capital city. Additionally the market is benefitting from the return of ‘lifestyle buyers’. After Darwin, the southernmost capital is also showing the second highest gross rental yields of any other capital city.”
Despite Hobart’s strong quarterly capital gain, Sydney still holds as the city with the highest rate of capital gain over the past twelve months where dwelling values are currently 13 per cent higher. The annual gain in dwelling values across the combined capitals index was 8.0 per cent at the end of January, ranging from a 13 per cent gain in Sydney to a 0.3 per cent reduction in dwelling values across Canberra.
Sydney has also shown the highest aggregated capital growth of any capital city in the years after the GFC.
Mr Lawless commented that since the beginning of 2009, Sydney has been a stand out housing market. From January 2009 through to January 2015 Sydney home values have increased by 57 per cent.
The second highest rate of growth over the same period has been in Melbourne where values are 50 per cent higher. There is a significant gap between the next best performers over the same six year period. Darwin has seen less than half the level of growth at 24 per cent, followed by Canberra at 18 per cent and Perth at 17 per cent total growth” Mr Lawless said