Australia’s dwelling values continue to grow, though the pace is slowing. Following a continual rise in October, the rate of growth slowed dramatically as a lack of affordability, less government stimulus and an influx of new listings hit the market, new figures show.
CoreLogic’s head of research Tim Lawless warns, a downturn could be “inevitable” should interest rates rise and supply outstrip demand in the coming months.
Even so, dwelling values are up by more than 20 per cent in most capital cities since October last year, CoreLogic’s national home value index shows.
Sydney experienced the second highest growth in value, being up by 1.5 per cent over October and a huge 28.33 per cent over the year, increasing the median to $1,071,709. Melbourne was up 0.99 per cent over October and 19.22 per cent over the year, and saw the median price rise to $780,303. Meanwhile, Perth was the only capital city to experience a drop in value, decreasing by -0.11 percent to a median of $526,525.
Nationally, the monthly dwelling value growth rose by 1.49 percent in October to a median dwelling value of $686,339, almost half of March’s peak rate of 2.8 percent.
CoreLogic’s head of research said growth had slowed as housing-related incentives like HomeBuilder and stamp duty relief had now ended, paralleled with new listings having surged by 47 per cent since September. The Australian Prudential Regulatory Authority will also tighten the way mortgage applications are assessed, making it a little more difficult for buyers to get finance, which may have an impact, though it would not be dramatic, Mr Lawless said.
“In the immediate future I think we will have more of the same price easing but people need to be prepared for the fact there could be a downturn,” Mr Lawless said.
CoreLogic data showed house continued to outperform units, as people looked for more space.
It was particularly evident in Sydney, where house values rose a stunning 30.4 per cent over the year to October, compared to the 13.6 per cent rise in unit values.