Bounce in big city homes

Values in Sydney, Melbourne show signs of life

SYDNEY and Melbourne house prices have shown their first monthly increase since the crest of the property boom in 2017, indicating a recovery could be in the pipeline.

Dwelling values in Australia’s two most populous cities rose 0.1 per cent and 0.2 per cent respectively, according to data released yesterday by property analytics firm CoreLogic.

It was the first monthly increase in Sydney values since the market peak in July 2017, while Melbourne dwelling values hadn’t risen since the market Close Change there moved through peak in November 2017.

CoreLogic head of research Tim Lawless said the May federal election and the decision in early June by the RBA, under Governor Philip Lowe (pictured), to cut the cash rate might have played a role.

“The improvement in housing market conditions over the first five months of the year has largely been organic, however since mid-May there has been a raft of announcements a that should provide a further positive flow through to housing demand,” Mr Lawless said.

“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.”

A 0.2 per cent fall in national dwelling values was the smallest month-on-month decline since March 2018.

“Potentially we are seeing the first signs that the top end of Sydney and Melbourne’s housing markets are leading the recovery trend,” Mr Lawless said. Since peaking in 2017, Sydney’s top quartile values are down 17.1 per cent and Melbourne’s top quartile is down 15.8 per cent, with both cities recording much larger falls across the top quartile relative to the broader market.

The only other regions to record a rise in housing values over the month were Hobart with a 0.2 per cent rise, as well as a 0.1 per cent lift for regional South Australia and a 0.2 per cent lift for the Northern Territory. Canberra and Darwin property prices fell by 0.9 per cent in June, while Perth prices dropped by 0.7 per cent to be down by 9.1 per cent for the past 12 months.

Across the regional markets, values were 0.4 per cent lower in June to be down 3.1 per cent for the financial year.

On a quarterly basis, every capital city housing market has recorded a drop in value, highlighting the broad geographic scope of this housing market downturn.