Highest rate of dwelling value growth since 2004

CoreLogic data has revealed Australian dwelling values saw the highest annual growth rate since 2004.

The latest CoreLogic housing market data found Australian dwelling values rose 13.5 per cent in the 2020-21 financial year, which was the highest annual growth rate in 17 years.

Regional New South Wales saw dwelling value changes for the financial year increase by 21.1 per cent, which was the most significant change across Australia. Sydney’s dwelling values rose by 15 per cent.

Darwin in the Northern Territory (NT) saw a dwelling value increase of 21 per cent, while regional NT rose by only 9.5 per cent.

Regional Tasmania’s dwelling values rose by 20.8 per cent, while Hobart rose by 19.6 per cent. Regional Queensland saw an increase of 17.1 per cent and Brisbane values increased by 13.9 per cent.

Despite multiple lockdowns, Melbourne still saw dwelling values increase by 7.7 per cent. Regional Victoria saw greater dwelling values increase, reaching 15.9 per cent.

Western Australia saw the lowest dwelling increase at just 2.2 per cent regionally, while metro Perth’s dwelling values increased 9.8 per cent.

Source: CoreLogic

The combined regional dwelling value increased by 17.7 per cent, while the combined capitals rose 12.4 per cent.

Australian dwelling values rose 6.1 per cent in the June quarter, down from a recent peak of 7 per cent in the three months to May 2021.

The 28-day rolling change in the CoreLogic Home Value index has seen a slowdown in growth across the combined capitals. It is likely the monthly growth rate for this upswing peaked in March 2021.

In the three months to June, most capital cities saw the strongest dwelling value growth across the top 25 per cent of values. However, Perth, Hobart and Darwin’s growth was led by the low end of the market values.

Quarterly dwelling value increases have ranged from 2.1 per cent across Perth to 8.2 per cent across Sydney. Slowing growth rates are evident across most capital city dwelling markets.

Sales volumes have risen 40.7 per cent in the financial year compared with the previous year. Hobart was the only region to see an annual decline in volumes, attributable to low levels of stock.

Sydney, Melbourne, Brisbane, Adelaide, Hobart, and Canberra’s dwelling values are currently at record highs.

Source: CoreLogic

In the year to June, Australian rent values increased 6.6 per cent, which is the strongest annual appreciation in rents since February 2009.

Gross rental yields compressed further through June due to value increases outpacing rent rises. Gross rental yields hit a record low 3.4 per cent nationally.

The highest gross rental yield across all states were in metro and regional Northern Territory at 6.1 per cent and 6.5 per cent respectively.

The lowest capital city gross rental yield was Sydney at 2.6 per cent, followed closely by Melbourne (2.8 per cent).

Source: CoreLogic

The typical time it takes to sell a property across Australia has reduced substantially in the three months to June compared with the same period last year. Median days on market has fallen from 49 days nationally to 29 days. 

Nationally, the typical vendor discount rate tightened down to 2.7 per cent in the three months to June, compared with being down 4.1 per cent in the same period last year.

New listings are trending higher, with new stock added to the market up 10 per cent on the five-year average level.

Source: CoreLogic

However, total listings are trending 4.7 per cent below the five-year average, and remain low across every broad region of Australia. 

For the week ending 4 July, the four-week average clearance rate across the capital cities was 73.8 per cent – well above the decade average of 63.5 per cent.

As the HomeBuilder scheme has tapered and dwelling values continue to increase, house building approvals are coming off record highs, down 10.3 per cent over May. Unit approvals ticked up 0.7 per cent in the month, but are 10.5 per cent below the decade average.

Source: CoreLogic

Investors continue to return to the market. New lending for the purchase of investment property across Australia jumped a remarkable 13.3 per cent in the month of May, reaching its highest level since June 2015.

First home buyers are comprising a smaller portion of market demand across every state.

The RBA maintained the cash rate at 0.1 per cent through July, and continues to monitor trends in home lending carefully.

Source: CoreLogic

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