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Home values across Australia’s capital cities have fallen by 0.3 per cent in January, led by a 0.9 per cent fall in Sydney, according to the latest CoreLogic data.
The fall takes dwelling values 0.7 per cent lower than their recent peak in September last year.
Dwelling value falls were most evident across the capital city areas, with the combined capitals index down by 0.5 per cent, while the combined regional areas continued to see values edging higher, up by 0.2 per cent in the month, CoreLogic’s January Hedonic Home Value Index has found.
The combined regional markets have now recorded a stronger monthly change in values relative to the combined capital cities over each of the past four months.
The softer conditions were led by Sydney (-0.9 per cent), with declines also in Melbourne (-0.2 per cent), Adelaide (-0.2 per cent), Perth (-0.4 per cent), Darwin (-0.2 per cent) and Canberra (-0.1 per cent). Brisbane remained unchanged.
CoreLogic head of research Tim Lawless said that he is unsurprised by the results.
“Housing market activity is generally more sedate from late December through to late January, a factor which can contribute towards higher volatility in housing market measurements due to the lower number of observations.
“Our experience has been that this seasonality doesn’t exert much influence over the trend in hedonic valuations.”
He added that the negative monthly result lines up with recent months.
“In the absence of a catalyst to reinvigorate the market, such as lower mortgage rates or a loosening in credit policies, we expect to see a continuation of softening conditions across these markets.”
Mr Lawless said that the Sydney housing market has now retraced 3.1 per cent after dwelling values surged by 75 per cent between February 2012 and the recent peak in July last year.
“With a history of such strong capital gains, the fall in Sydney housing values to date has been mild and the vast majority of Sydney home owners remain in a strong equity position.”
He further said that Melbourne’s housing market has recorded two successive month-on-month declines, following a 59 per cent surge over the growth cycle.
Since peaking in November last year, the cumulative decline is only 0.4 per cent, highlighting Melbourne’s resilience to a downturn in values relative to Sydney.
The head of research said: “Focusing on the results over the past three months, the trend in housing market conditions becomes clearer, with the only capital cities to record a decline over the three months ending January being Sydney, Perth and Darwin.
“It was the first time since the three months to December 2006 that Sydney recorded the weakest value change of all capital cities.”
Mr Lawless added that Hobart remains the only capital city to record double-digit growth over the past 12 months, with dwelling values up by 12.4 per cent.
But with values rising quickly in Hobart and easing in Sydney and Melbourne, Mr Lawless said that “this affordability advantage is being eroded”.
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