Research by CoreLogic has confirmed that over the past 20 financial years combined capital city dwelling values fell just twice.
Over the last twelve months, CoreLogic found that combined capital city dwelling values increased by 9.6 per cent, which was actually greater than the 8.3 per cent rise over the 2015-16 financial year.
According to research analyst Cameron Kusher, combined capital city dwelling values have now increased over five successive financial years. However, prior to these increases there were successive financial years in which values fell (-1.4 per cent in 2010-11 and -3.6 per cent in 2011-12).
In most capital cities, the rate of value growth over the past financial year was superior to that over the previous year; the exceptions were Brisbane and Darwin. A number of cities recorded their greatest increases in values for several years, highlighting that the rate of growth has been accelerating.
“Two of the primary factors influencing the rebound in capital gains during the most recent financial year was the increase in investment activity after 2015-16, which saw investment activity slow on the back of changed prudential policies implemented by APRA, as well as successive rate cuts in May and August last year that added further incentive to property buyers,” Mr Kusher said.
With a new round of macro prudential policies announced at the end of March this year, Mr Kusher said it is likely there will be a similar, if not more pronounced, slowdown in investment activity across the housing market.
“Coupled with affordability constraints and higher mortgage rates, we expect the 2017-18 financial year will record a less substantial rate of capital gains that what was seen in 2016-17.”
How the Capitals performed over the 2016-2017 financial year:
Sydney: Dwelling values increased by 12.2 per cent over the past year, the fifth successive year in which values rose. Value growth was slightly higher than the 11.3 per cent over the previous financial year.
Melbourne: Values have now increased for five successive financial years, with each of those years progressively seeing a faster rate of value growth. Over the past year, values increased by 13.7 per cent, which was their greatest increase over a financial year since 2009-10.
Brisbane: A two per cent increase in values over the past financial year was down on the 5.3 per cent the previous year. Brisbane values have increased over each of the past five years; however, last year was the slowest rate of growth since 2012-13.
Adelaide: The 2.4 per cent rise in values over the past year eclipsed the 2.1 per cent increase the previous year and marked the fifth consecutive financial year in which values increased.
Perth: Dwelling values have fallen over each of the past three financial years; however, the rate of decline has slowed from -4.7 per cent in 2015-16 to -1.3 per cent in 2016-17. At no other time over the past 20 years have values fallen over three successive financial years in Perth.
Hobart: The 6.8 per cent increase in dwelling values over the past financial year was the greatest increase in values over a financial year since they rose by 8.5 per cent in 2005-06.
Darwin: Dwelling values have fallen for three successive financial years. The -7.0 per cent fall in values over the year was the largest annual decline since values fell by -12.6 per cent over the 2010-11 financial year.
Canberra: Values rose by 9.6 per cent over the last financial year, the greatest rise in values over a financial year since 2009-10 when values increased by 13.3 per cent.
