CoreLogic’s monthly index report has shown that five out of the eight capital cities recorded slight growth over the last month, for a combined growth of 0.1 per cent for capital cities.
Most of this growth occurred in the east coast cities, it was outlined, while Perth, Adelaide and Canberra experienced negative growth to dwelling values.
Despite the small gains, CoreLogic’s head of research, Tim Lawless, said he does not believe the reaching of the floor is a sign that Australia’s property market is going to bounce back.
Although the trend towards a recovery in housing values is “relatively fresh” and centred within the largest cities, Mr Lawless has noted no sign of a “V-shaped” recovery.
Driving the turnaround
The primary driver for the housing market’s turnaround has been credited to Australia’s two largest cities: Sydney and Melbourne.
The report observed values across the two cities as having ticked higher over the past two months, with Sydney taking 0.3 per cent off its floor and Melbourne moving 0.4 per cent above its bottom point.
Brisbane was also noted as having experienced its first month-on-month rise since November last year, having grown by 0.2 per cent over the same period.
“Despite an unprecedented amount of new apartment stock entering the market, Sydney and Melbourne unit values have consistently outperformed the detached housing sector through the downturn, and this trend is continuing into the recovery phase,” Mr Lawless commented.
Noting the property market’s undertaking of a correction, Mr Lawless attributed stronger performances across the unit sector to ongoing affordability challenges in Sydney and Melbourne.
He said the result of this is that more investors are being driven towards purchases in medium and high-density offerings.
Observing that values for higher-density dwellings are generally lower, Mr Lawless said: “There may be some dampening of unit values in coming months across those precincts where supply is elevated as the large number of high-rise off-the-plan apartment sales moves into the resale market.”
Cameron Micallef is a journalist at Nest Egg, writing primarily about personal wealth and economic markets.
Prior to this, Cameron worked for Australian Associated Press. He graduated from the University of Wollongong with a double degree in communications and commerce.