Dwelling values continued to fall across Sydney, Melbourne and Perth in October, pushing the CoreLogic national hedonic home value index further into negative territory.
Citing tighter credit conditions as a contributor to slower housing activity and lower dwelling values across Australia, CoreLogic head of research Tim Lawless said, “the latest results take the annual decline across the national index to 3.5%, signaling the weakest macro-housing market conditions since February 2012, with our hedonic home value index reporting a 0.5% fall in dwelling values nationally in October.”
On a rolling quarterly basis, dwelling values are now trending lower across both the combined capital city regions (-1.6%) as well as the combined regional areas of Australia (-0.7%). Mr Lawless said, “With such broad-based weakness in housing market conditions, it’s clear that tighter credit availability is acting as a drag on housing demand and impacting adversely on the performance of housing values across most areas of the country.”
The weakest conditions continue to be felt across Australia’s two largest cities where investment buyers have been the most concentrated, supply additions have been the highest and where housing affordability is the most stretched.
Sydney values are down 7.4% over the past twelve months and Melbourne values are 4.7% lower over the same period. Values also declined in Perth and Darwin however, the downturn in these two cities has been ongoing since mid-2014, with values falling 3.3% and 2.9% respectively over the past twelve months. Although dwelling values are rising on an annual basis across the remaining cities, the pace of growth has eased.
The regional housing markets of Australia have also returned a diverse performance, with regional Tasmania standing out as the only broad region nationally where dwelling values are recording double digit growth (+11.4%). Both Hobart and regional Tasmania continue to record strong housing market conditions, driven by robust housing demand coupled with a shortage of supply.
Regional Victoria is also showing strong growth conditions as demand continues to ripple outwards from Melbourne towards the more affordable cities peripheral to the city’s metropolitan area.
Regional Western Australia continued to show challenging conditions with the annual pace of decline revealing some renewed momentum with values falling by 6.5% over the past twelve months.