Values bounce with Spring

Spring has brought a lift in home values across most capital cities, according to the latest monthly data released by CoreLogic.

September marked a striking turn in housing market sentiment, Corelogic’s data analysts suggest, with consumer confidence increasing, new listings up, and six of the eight capital cities recording a rise in values over the month.

However, falling values in Melbourne and Sydney, which make up approximately 40 per cent of Australian’s housing stock by number and 55 per cent by value, pushed the national reading into a fifth straight month of decline.

CoreLogic’s September home value index showed a 0.1 per cent fall in dwelling values nationally.
The result comprised a 0.2 per cent drop in the combined capitals index and a 0.4 per cent rise in the combined regionals index. Although the national index was down over the month, the 0.1 per cent decline was the smallest since values started to reduce in May this year.

According to CoreLogic's head of research, Tim Lawless, Melbourne remains the main drag on the headline results.

“By far the weakest result across the capital cities, Melbourne housing values were down 0.9 per cent in September”, Lawless said.

“Since peaking in March, Melbourne values are down 5.5 per cent. With restrictions starting to lift and private home inspections once again permitted, we expect to see activity lift in October.”

The rate of decline across Sydney’s market (down 0.3 per cent in September) has been consistently easing since July.

The remaining capital cities have all returned to some level of growth, with Brisbane up 0.5 per cent, Adelaide 0.8 per cent, Perth 0.2 per cent, Hobart and Canberra both up 0.4 per cent, and Darwin values rising by 1.6. per cent.

Regional markets continue to out-perform relative to the capital cities. At a broad level, the combined regionals index has slipped only 0.8 per cent since March while capital city values have fallen by 2.6 per cent over the same period. In September, every ‘rest of state’ region except Western Australia recorded a lift in housing values.

Lawless believes the resilience in regional values can be attributed to a number of factors.

“From a cyclical perspective, regional areas weren’t recording the same growth conditions pre-COVID, so home values in these markets are often more affordable, and don’t have a high base to fall from”, he said.

“Anecdotally we are also observing a transition of demand away from the cities towards the major regional centres, particularly those that are adjacent to the larger capitals where residents can commute back to the cities if required.

“Remote working arrangements are no doubt a factor in supporting demand in these markets, but lifestyle opportunities and a desire for lower density housing options are also playing a part”, Lawless concluded.