CoreLogic’s national Home Value Index posted a 0.3% rise in February, breaking the short and shallow downturn that lasted just three months and dragging the national measure of home values -0.4% lower.
The February rise was subtle, but broad based, with every capital and ‘rest-of-state region except Darwin (-0.1%) and Regional Victoria (flat) recording a monthly rise in values.
- Melbourne and Hobart led monthly gains. The largest month-on-month change across the capitals was recorded in Melbourne and Hobart (both up +0.4%) where home values have previously been among the weakest. For Melbourne, the lift breaks a streak of ten consecutive months of falling home values.
- Conversely, the mid-sized capitals of Brisbane, Perth and Adelaide have lost their mantle as the strongest growth markets. With a monthly change of 0.2% to 0.3%, the mid-sized capitals were outpaced by Melbourne and Hobart. Adelaide and Brisbane are still leading rolling quarterly growth trends, up 1.2% and 0.9% respectively, but Perth’s value growth has slowed more sharply with downward revisions over recent months dragging the quarterly change to just 0.3%.
- The return to growth across Sydney and Melbourne is being driven by the more expensive end of the market, with upper quartile house values leading the monthly gains in both cities after high-value markets recorded the sharpest declines. This stronger performance is in line with earlier research from CoreLogic, which highlighted that premium housing markets in Sydney and Melbourne have historically been the most sensitive to rate cuts.
CoreLogic’s research director, Tim Lawless, said the improved housing conditions have more to do with improved sentiment than any immediate improvement in borrowing capacity.
“Expectations of lower interest rates, which solidified in February, look to be flowing through to improved buyer sentiment.
“Along with the modest rise in values, we have also seen an improvement in auction clearance rates, which have risen back to around long-run average levels across the major auction markets.”
Regional housing conditions continued to show a stronger growth trend relative to the capital city counterparts in February, with values across the combined regionals index rising 0.4% over the month and 1.0% over the rolling quarter - compared to the 0.3% monthly rise and -0.4% quarterly fall seen in capital city values.
However, there has been some diversity in these trends, with the monthly change favouring Sydney, Melbourne and Hobart over their regional counterparts.
Improved market conditions may also be supported by a slowdown in the flow of freshly advertised ‘for sale’ listings. Counts of new listings coming to market across the combined capitals were tracking -4.7% lower than a year ago over the four weeks to February 23, and -1.5% below the previous five-year average.
CoreLogic Australia