6 out of 8 capital cities have hit record-high dwelling values

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April 09 2021
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CoreLogic’s national home value index increased a further 2.8 per cent at the end of March, placing values 5.6 per cent above the previous market peak in October 2017.

Six capital cities have reached a new record-high value, taking the national home value index 5.6 per cent above its previous market peak of October 2017.

Perth and Darwin, however, saw their values substantially below their record highs from 2014. In fact, Perth trailed behind by 15.9 per cent, while Darwin’s dwelling values sat 21.6 per cent below their previous peak.

CoreLogic attributed these setbacks to a decline in the resources-related infrastructure sector. But, the agency noted, both cities have entered a recovery trend, with prices said to rise in the near future.

On the other end of the scale, the ACT topped Australia’s dwelling value surge, with end of March growth surpassing the capital’s previous peak of April 2019, by 16.9 per cent.

According to new data from CoreLogic, rapid dwelling value growth across the capital has largely been driven by house values, which are 19.7 per cent above the previous high in April 2019, compared with a 7.2 per cent uplift in unit values.

Key to the ACT’s growth are the relatively high incomes across the territory, along with resilient labour market performance through COVID-19.

Next up was Hobart, with housing values soaring 12.3 per cent since the previous peak recorded in February 2020. Hobart dwelling values have seen extraordinarily strong growth, with the annualised capital growth return sitting at 9.4 per cent for a five-year period.

Growth rates are, however, predicted to ease in the coming months on the back of affordability constraints and additional stock.

Adelaide was Australia’s third best performer at the end of March, with values peaking at 7.7 per cent above their previous high in May last year.

The rate of change in dwelling values jumped to a monthly increase of 1.5 per cent over March 2021, which is the highest monthly growth rate seen across the city since December 2007.

Brisbane was up next, with dwelling values surpassing the previous April 2020 peak by 6.5 per cent. But according to the data, Brisbane’s recovery journey has been varied, with weak conditions across the unit sector, mostly due to previously high levels of unit completions keeping values subdued.

Coming in in fifth place was Sydney with slightly less impressive growth of 2.6 per cent above its last peak witnessed in July 2017, after the city took 44 months to reach a new record-high value.

While COVID-19 interrupted Sydney’s upswing, a recovery in economic conditions, together with increased consumer confidence, has pushed values above the previous peak, CoreLogic noted.

The city that arguably suffered the country’s toughest COVID lockdown, Melbourne, saw its dwelling values climb 0.7 per cent above the pre-COVID high.

As the value of Melbourne housing nudged over its previous peak, CoreLogic noted that the market has not recovered evenly, with house values down 1.8 per cent below the previous November 2017 high.

Overall, CoreLogic has put the combined value of Australian dwellings at $7.9 trillion at the end of March – a figure it said cements residential property as an extremely large and important asset class.

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