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Australian housing values have moved into recovery mode, according to new research by CoreLogic.
The company’s national home value index has shown positive month-on-month growth through October following five months of consistent declines in residential property values.
Nationwide, values saw a 0.4 of a percentage point rise, with every capital city, excluding Melbourne, posting an increase over the month.
“Over the month, dwelling values increased by more than 1 per cent in each of the smallest four capital cities, with Brisbane, Adelaide, Hobart and Canberra housing values reaching new record highs,” CoreLogic’s research noted.
“Although values were lower across Melbourne through October, the trend rate of decline has been easing since mid-September. With a drop of 0.2 [of a percentage point], this was the smallest month-on-month drop in values since the COVID-19-related downturn commenced in April.
“Since the announcement that private home inspections were once again permitted across Melbourne, new property listings have surged, clearance rates have lifted and buyer activity is recovering. Based on this recent trend in housing values and activity, it seems likely we will see Melbourne follow the other capital cities towards a recovery over the coming month.”
Commenting further, CoreLogic’s head of research, Tim Lawless, said it was evident there was a divergence between house and unit market performance.
“The rise in capital city housing values over the month was entirely attributable to a 0.4 [of a percentage point] lift in house values which offset the 0.2 [of a percentage point] fall in unit values. Through the COVID period so far, unit values have actually shown a smaller decline in values than houses, but this is likely to change,” Mr Lawless explained.
“Almost two-thirds of Australian units are rented, and rental conditions have weakened, especially in the key inner-city precincts of Melbourne and Sydney. These areas have a higher concentration of unit stock and historic exposure to demand from overseas migration.
“Low levels of investment activity, relatively high supply of unit stock in inner cities and international border closures are key factors that imply units will underperform relative to houses over the medium term.”
Further, Mr Lawless noted that regional housing markets continue to outperform the capital cities.
“Broadly, CoreLogic’s combined regionals index has held relatively firm through the worst of the COVID-related downturn,” he said.
“The past two months have reversed the previous mild falls across the combined regional areas. In the seven months since March, regional dwelling values are up by 1.7 per cent while values across the combined capitals index have fallen by 2.3 per cent.”
ABOUT THE AUTHOR
Emma Ryan
Emma Ryan is the deputy head of editorial at Momentum Media.
Emma has worked for Momentum Media since 2015, and has since been responsible for breaking some of the biggest stories in corporate Australia, including across the legal, mortgages, real estate and wealth industries. In addition, Emma has launched several additional sub-brands and events, driven by a passion to deliver quality and timely content to audiences through multiple platforms.
Email Emma on: Emma.Ryan@momentummedia.
