Recent research from CoreLogic showed that home market continued to weaken through September, with national dwelling values declining 0.5% over the month. This marked a year of consistently dropping values across the property data provider’s national hedonic home value index.
After the national index hit its peak the preceding year, home values have decreased by 2.7%, making for a slower rate of decline than the last housing market downturn. During the slump between June 2010 and February 2012, values fell by 3.0% over the first twelve months.
For this current decline, CoreLogic Head of Research Tim Lawless noted that Sydney and Melbourne – two of the biggest capital cities – led the downward trend.
“While the housing market downturn is well entrenched across Darwin and Perth where dwelling values remain 22.1% and 13.2% lower relative to their 2014 peak, Sydney and Melbourne are now the primary drag on the national housing market performance,” he said.
“We’ve seen Sydney dwelling values drop 6.1% over the past twelve months and Melbourne values are 3.4% lower. Not only are these amongst the largest annual falls across the capital cities, but considering Sydney and Melbourne comprise approximately 60% of the national value of housing, the weak conditions in these cities have a substantial drag down effect on the overall national housing market performance.”
The pace of hikes has significantly slowed in Brisbane, Adelaide, Hobart and Canberra, despite the yearly increase in these cities’ home values.
Data showed that in 2017, the annual gain in Brisbane was trailing at 2.9% and has since decelerated to just 0.8% over the past twelve months. Adelaide values were climbing at the annual rate of 5% a year ago, slowing to 0.7%. Meanwhile, Hobart saw its annual growth rate slow from 14.3% to 9.3%. Lastly, annual increases drastically decreased in Canberra from 7.8% to 2%.
Bucking the trend were Perth and Darwin, whose yearly rate declines have eased.
The report also highlighted the more challenging situation of regional markets, given that this segment has been more resilient to falls than in the capital cities. While regional Western Australia (WA) was the only ‘rest of state’ region to record a decline in dwelling values over the past year, the September quarter saw values declining in more areas. Apart from WA, which was down by 3.4%, the following registered decreases in the quarter: Regional New South Wales (-1.3%),Regional Victoria (-0.2%), Regional Queensland (-0.6%), and Regional South Australia (-0.3%).