CoreLogic’s MARCH Home Value Index confirmed First National Real Estate’s view that the market has neared the bottom of the current cycle, with the national house value index rising 0.6% in March.
Dwelling values were higher across the four largest capital cities and most of the broad ‘rest-of-state’ regions, led by a 1.4% gain in Sydney. The rise has been attributed to a combination of low advertised stock levels, extremely tight rental conditions and additional demand from overseas migration.
Advertised supply has been below average since September last year, with capital city listing numbers ending March almost-20% below the previous five-year average. Purchasing activity has also fallen but not as much as available supply; capital city sales activity was estimated to be roughly-7% below the previous five-year average through the March quarter.
Top end properties lead the recovery
The lift in housing values was most evident across the upper quartile of Sydney’s housing market. House values were up 2.0% in March and the upper quartile of the unit market was 1.4% higher over the month.
Regional properties rise 0.2% nationally, SA & WA resilient
Regional housing markets showed firmer conditions as well, with the combined regionals index rising 0.2% over the month. Housing values across Regional WA and Regional SA remain at cyclical highs despite 10 rate hikes.
SA’s Fleurieu-Kangaroo Island sub-region led capital gains over the month with a 2.6% rise in dwelling values followed by Dubbo, NSW (2.5%), Wellington, Victoria (2.4%) andMid-West, WA (2.1%).
The best performing regional markets are quite different to what we were seeing through the recent growth cycle, according to CoreLogic.
It is mainly rural areas that are seeing the strongest increases, rather than the commutable coastal and lifestyle markets that were booming through the upswing. However, some subtle growth is returning to regions within commuting distance of the major capitals, after many recorded a sharp drop in values.
Hobart, Canberra, Darwin & Adelaide face declines
Hobart recorded the largest drop in home values among the capital cities,down-0.9% over the month. Housing values across the southern most capital have fallen-12.9% since peaking in May last year; overtaking Sydney as the largest cumulative fall from peak across the capital cities. However, the pace of decline has been easing across Hobart over the past three months. Hobart can probably anticipate the arrival of speculative buyers shortly.
Canberra (-0.5%), Darwin (-0.4%) and Adelaide (-0.1%) also recorded a decline in values over the month, as did Regional Victoria (-0.1%) and Regional Tasmania (-0.7%).