Property values across Sydney and Melbourne have lifted for the first time since 2017 amid signs the re-election of the Morrison government and cuts to official interest rates have boosted confidence in the housing sector.
But the turnaround in the nation’s two largest property markets has yet to spread to the rest of the country with the CoreLogic measure of values showing sharp falls in Brisbane, Adelaide, Perth and Canberra.
Nationally, property values dipped by 0.2 per cent in June to be down by 1 per cent over the past quarter and by 6.9 per cent over the past year.
Property values in Sydney and Melbourne lifted in June, the first increase since 2017.CREDIT:AFR
In Sydney, values lifted by 0.1 per cent, the first increase since June 2017.
The lift was driven by the apartments’ sector with the value of units across Sydney up by 0.3 per cent through the month. Values of houses were flat.
In Melbourne, values lifted by 0.2 per cent with houses up by 0.1 per cent while apartments jumped by 0.5 per cent.
Despite the improvements, both Sydney (minus 9.2 per cent) and Melbourne (minus 11.8 per cent) are still well down over the past 12 months.
Elsewhere, house values fell in Brisbane (0.5 per cent), Adelaide (0.5 per cent), Perth (0.7 per cent), Darwin (1.7 per cent) and Canberra (0.9 per cent).
CoreLogic’s Tim Lawless said several factors, including continued strong population growth in Sydney and Melbourne, were contributing to the stabilisation of the property market.
“Stability within the federal government, along with the removal of uncertainty surrounding changes to negative gearing and capital gains tax discounts, has brought about increased certainty and boosted confidence in the housing market,” he said.
“Aided by the housing downturn, we have also seen an improvement around housing affordability, although dwelling values remain high relative to household incomes in Sydney and Melbourne; add to this lower mortgage rates and the high likelihood that interest rate serviceability tests are set to improve.”
While Sydney and Melbourne overall were up, CoreLogic reported differences between key parts of the two markets.
Melbourne’s inner east experienced a 2.7 per cent lift through the quarter while Sydney’s inner city and inner south both lifted by 1.3 per cent.
Mr Lawless said it was the top end of the two markets holding up prices.
Values in the bottom quarter of the Sydney market dropped by 1.7 per cent over the quarter compared to a 1 per cent fall in the top quarter. Melbourne’s top quarter fell by 0.1 per cent over the same period compared to a 0.6 per cent drop in the bottom quarter.
“Potentially, we are seeing the first signs that the top end of Sydney and Melbourne’s housing markets are leading the recovery trend,” he said.
The figures come ahead of the Reserve Bank of Australia’s July board meeting on Tuesday with markets putting the chance of an interest rate cut at 70 per cent.
Such a cut would take the official cash rate down to a fresh record low of 1 per cent.
Ref: Shane Wright (July 1, 2019 — 10.01am). Sydney and Melbourne property values lift for first time since 2017. Retrieved from https://www.theage.com.au/politics/federal/sydney-and-melbourne-property-values-lift-for-first-time-since-2017-20190701-p522ut.html