Sydney experiences flat growth for Spring
Spring has finally sprung and for Sydney’s housing market, September has seen the start of value growth flattening with dwelling values down. The September CoreLogic RP Data Home Value Index also shows that dwelling vales are also down for Melbourne and Brisbane.
Over the past twelve months, dwelling values in Sydney have increased by 16.7% and are almost 50% higher over the growth cycle to date, according to Tim Lawless, CoreLogic’s head of research.
“The slower month-on-month reading across the Sydney market comes at a time when auction clearance rates have slipped to the low 70 per cent range from week-to-week and the number of advertised properties has risen. Vendors are still enjoying strong selling conditions, but it looks like buyers are slowly regaining some leverage in what has been a very hot market.”
During September, Sydney’s dwelling values only grew by 0.1%, compared to 1.1% in August, whilst the median dwelling price has grown from $773,000 in August to $785,000 in September. The capital city which experienced the greatest amount of growth was Melbourne, with a 2.4% growth for September, followed by Brisbane with a 1.4% growth and then Canberra at 1.0% and Perth 0.5%.
At the bottom of the table were Darwin, Adelaide and Hobart with negative dwelling values of -0.3%, -1.2% and -1.9% respectively for September.
In terms of the quarter, Melbourne now takes number one spot with an increase of 7.4% over the quarter, followed by Sydney (4.6%), Brisbane (1.9%) and Darwin (0.4%). The capital cities that saw a fall in dwelling values across the quarter include Canberra (-0.4%), Perth (-0.7%), Adelaide (-1.6%) and Hobart (-2.0%).
The cause of the declining dwelling prices for half of the capital cities is due to “weakening labour markets, slower population growth and less demand for housing is placing downwards pressure on prices to differing degrees across these markets,” according to Mr Lawless.
Interestingly, it is the most expensive quartile of the property market which has seen the greatest level of growth across the combined capitals. This top quartile has seen a 12.3% growth over the last 12 months, whilst the most affordable end has experienced a lower level of growth of 8.5%.
Mr Lawless stated, “This trend holds true across Sydney and Melbourne, however in Brisbane, Adelaide and Perth it is actually the most affordable end of the housing market that has recorded the best results.”
Many investors are now turning their heads towards Brisbane as there is better value here compared to Sydney which still has very high property prices and has already experienced its peak. Brisbane has yet to boom and this means it is a great time to buy a new apartment in Brisbane right now, especially as there are many new apartments available within close proximity of the CBD.
Even though Sydney has seen a lower level of growth in September, apartment approvals during August actually reached an all-time high in NSW and according to Urban Taskforce, “NSW has achieved record levels of apartment approvals in August, adjusted for trends, with 3,467 apartments approved.”
Interestingly, VIC took the limelight for overall home approvals, but NSW now takes the lead with 5,794 approvals, compared to 5,211 in VIC.
Although NSW is experiencing a growth in new apartment approvals, nationally housing approvals has dropped, and could suggest that the housing market might be starting to slow down. However, high density apartments across Australia are close to becoming the dominant housing type being approved. There were 9,562 house approvals compared to 9,158 apartment approvals.
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Published on 6th of October 2015 by Marty Stanowich