Dwelling values in Sydney still strong in April
Dwelling values across most of Australia’s capital cities have increased again during April, with the combined capital cities seeing a 0.8 per cent increase. The only capital city not to see an increase in dwelling values this month is Canberra which saw a decrease of 1.5 per cent according to the CoreLogic RP Data Hedonic Home Value index.
Dwelling values are now 7.9 per cent higher over the last twelve months across the combined capital city index, despite the slower month on month reading, stated Tim Lawless, head of research at CoreLogic RP Data.
The recent cut in interest rates in February has had an impact in this, particularly for Sydney as well as Melbourne where both cities have seen a higher rate of capital gain alongside very strong auction results with private properties selling at a much faster rate.
The median dwelling price in Sydney has increased by 1 per cent in April, 5.4 per cent for the quarter and 14.5 per cent YOY and now sits at a whopping $732,500. Dwelling prices in Sydney are now an impressive 40.2 per cent higher relative to the May 2012 trough and remains as the most expensive city in Australia to buy a property.
Melbourne is the next Australian capital city with the second median dwelling price of $555,000, with a 0.8% increase for the month, 1.6 per cent increase for the quarter and up 6.9 per cent YOY.
Brisbane now has a median dwelling price of $452,000 which has increased by 0.6 per cent in April and 2.2 per cent YOY, but is down by 0.5 per cent for the quarter.
On the other hand, Perth and Darwin have seen a slower rate of growth mainly due to the slowdown in mining and the infrastructure projects.
Although dwelling values have increased by 0.8 per cent for the combined capital cities, this is down from March which saw a 1.4 per cent increase month on month. Does this mean dwelling values are starting to slow down now in Sydney? I expect that Sydney will still be a strong market to buy in, with plenty of opportunity for more growth, especially with the record low interest rates of 2 per cent which is sure to fuel buyers into buying now.
Even though dwelling values are increasing, the rental market has seen a slower rate of growth with weekly rents increasing by 1.7 per cent over the past twelve months across the capital cities. In spite of this Perth, Darwin and Canberra saw a fall in rents. Sydney however has seen the highest rental growth with rents 3.3 per cent higher over the year, which is another reason why Sydney is still a good place to buy an investment property right now.
Published on 13th of May 2015 by Marty Stanowich