National property value surge to persist
If current growth run rates are maintained, the national value index is likely to reach a new nominal high over the next two months, new figures have revealed.
CoreLogic’s February 2020 Home Value Index has found a rebound in the pace of capital gains across the Australian housing market throughout the month, seeing the national index rise by 1.1 per cent.
Leading the charge, the strongest capital gains were recorded in Sydney, at 1.7 per cent to $872,934, and Melbourne, at 1.2 per cent to a median house value of $689,088.
The gains meant that on an annual basis, both cities have returned to double-digit annual growth rates, with values up by 10.9 per cent and 10.7 per cent, respectively.
According to CoreLogic, the latest results “continue the recovery trend that has been running since June last year”.
It noted while there has been large variability in capital growth from region to region and across product types, nearly every capital city is showing an upwards trajectory.
Melbourne was highlighted as being the “most recent city to stage a nominal recovery, with housing values surpassing the September 2017 peak last month”.
It means the Victorian capital now joins Brisbane ($503,265), Canberra ($631,862), Hobart ($488,968) and Adelaide ($439,453) in reporting housing values at record highs.
Despite having posted the fastest trend in recovery, Sydney property values are still 3.7 per cent below their previous 2017 peak, but are expected to return to record growth by May, according to the analysis.
For Perth, a 0.3 of a percentage point increase in dwelling values reported for the month is being flagged by CoreLogic as “evidence that the long-running downturn is over”.
It’s the city’s fourth consecutive month without a value drop, bringing values to a median of $442,691.
The company’s head of research, Tim Lawless, conceded that despite values now trending higher, “the recovery period is likely to be a long one, with Perth housing values remaining 21 per cent below their peak”.
Darwin was the only capital not to record a rise in values over February, with values down by 1.4 per cent, and 1.8 per cent for the quarter.
The median house value is now reported as being $386,345.
Despite this, the city has managed the highest rental yield for investors over the past three months, offering up a 5.9 per cent rate.