Melbourne becomes best performing capital city in 2016
It’s all change for the property market as Melbourne becomes the best performing capital city in Australia. According to the January 2016 CoreLogic RP Data Hedonic Home Value index results, dwelling values were 0.9% higher in January across Australia’s capital cities. This growth has come about due to a rebound that has been seen in both Sydney and Melbourne markets.
However, this recent growth has now pushed Melbourne into first place knocking Sydney from its number one spot which it held for quite some time. Over the past twelve months, Melbourne saw dwelling values rise by 11 per cent, compared to Sydney which experienced a rise of 10.5 per cent.
The combined capitals experienced a rise of 0.9 per cent in January, compared to experiencing no change during December and a drop of 1.5 per cent in November.
Looking in more detail at the monthly figures, Hobart saw the greatest amount of growth with 4.7 per cent increase in dwelling values, followed by Canberra (2.8 per cent) and Melbourne in third place with 2.5 per cent. Sydney dwelling values also saw a rise of 0.5 per cent, whilst the remaining four capitals (Adelaide, Darwin, Brisbane and Perth) experienced flat or declining dwelling values.
In terms of the quarter, Hobart again led the way with a growth in dwelling values of 3 per cent, followed by Perth (1.7 per cent) and Canberra (1.2 per cent). Brisbane also saw positive growth over the quarter with an increase of 0.8 per cent. All the other capital cities experienced a fall in dwelling values over the quarter, with Sydney experiencing the greatest decline at -2.1 per cent.
In spite of Sydney’s falling dwelling prices, the median dwelling price still sits at $776,000, followed by Melbourne with a median dwelling price of $595,000. Brisbane remains in third position at $478,200.
The past twelve months have seen capital city dwellings rise by 7.4 per cent, with Melbourne having the greatest capital growth YoY of 11 per cent, stripping Sydney of its number one spot which saw 10.5 per cent growth.
According to Tim Lawless, Sydney’s annual rate of capital gain is now at a 29 month low and has been progressively softening since peaking at 18.4% in July last year.
Mr Lawless also added, “Melbourne’s housing market has been more resilient to slowing growth conditions which has propelled the annual growth rate to the highest of any capital city, with dwelling values 11.0% higher over the past twelve months. Previously, during the height of the growth phase, there was a large separation between Sydney’s housing market, which was streaking ahead, and Melbourne’s, where the rate of capital gain was substantial but still well below the heights being recorded in Sydney. The latest data reveals Sydney’s housing market is now playing second fiddle to Melbourne’s, at least in annual growth terms.”
“In fact, over the past six months, the performance gap between Sydney and Melbourne is stark. Sydney dwelling values have reduced by 0.6 per cent between July last year and the end of January 2016, compared with a 3.0 per cent rise across Melbourne dwelling values. The last six months have also seen both Brisbane and Canberra dwelling values rise by 2.0 per cent while Hobart values are 1.3 per cent higher and Adelaide dwelling values have been virtually flat with a 0.1 per cent rise,” Mr Lawless said.
Interestingly, NSW has also seen a drop in residential and non-residential building approvals over the past six months, according to the latest figures from the Australian Bureau of Statistics.
NSW is now behind both Victoria and Queensland, even though these states are smaller that NSW. This could be due to NSW experiencing normal production levels or it could be attributed to less consumer confidence in the market through the tightening of bank loans.
Published on 8th of February 2016 by Marty Stanowich