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Home Value Index shows Sydney recovery, and Brisbane takes over from Canberra as the second-most expensive capital city

CoreLogic’s Home Value Index rose 0.8% in May, the 16th consecutive month of growth and the largest monthly gain since October last year.


The mid-sized capitals continued to lead the pace of growth, with Perth home values up 2.0% in May, Adelaide rising 1.8% and Brisbane up 1.4%.  In dollar terms, it’s the equivalent of the median dwelling value rising by more than $12,000 month-to-month in each city.

The remaining capital cities recorded milder conditions, ranging from a 0.6% lift in Sydney values to a monthly decline of -0.5% in Hobart and a -0.3% fall in Darwin.

CoreLogic research director, Tim Lawless, said extremely low levels of available supply across the strongest markets provide the best explanation for the difference in growth rates. 

 

“The number of properties available for sale in Perth and Adelaide remain more than -40% below the five-year average for this time of the year while Brisbane listings are -34% below average,” Mr Lawless said.


“Inventory levels in these markets remain well below average despite vendor activity lifting relative to this time last year.  Fresh listings are being absorbed rapidly by market demand, keeping stock levels low and upwards pressure on prices.”


Conversely, listings across Hobart are tracking 41% above the five-year average, a consequence of lower demand, with home sales -6.4% below the previous five-year average over the rolling quarter.


A changing of the guard:  With Brisbane housing values consistently posting solid capital gains while ACT values remain relatively stable, we saw a changing of the guard in May.  Brisbane overtook Canberra as having the second-highest median dwelling value across the capitals in May, a position Brisbane hasn’t recorded since 1997.


In January we also highlighted Brisbane dwelling values overtaking the Melbourne median.  This was partly compositional, with the overall median dwelling value in Melbourne being weighed down by a high concentration of relatively cheap units. However, Brisbane house values are now also higher than the median house value across Melbourne, for the first time since June 2008. The median house value in Brisbane is currently $937,479, $190 above the Melbourne median. The median unit value in Brisbane, at $615,429, is also now higher than the median unit value in Melbourne, which is $614,299.


Coming into the pandemic Melbourne’s median dwelling value held around a 37% premium over Brisbane’s, and ACT’s median was approximately 24% higher. However, Brisbane values have increased at more than five times the pace of Melbourne values since the onset of COVID, with growth of 59.8% and 11.2% respectively.  Brisbane has also substantially outpaced growth in the ACT where values are up 31.8% since March 2020.


Sydney values recover:  The Sydney market also reached a new milestone in May, posting a nominal recovery, equaling the earlier record high set in January 2022.  Sydney dwelling values dropped by -12.4% following the January 2022 peak, finding a floor a year later.  The market has since posted a 14.1% rise through the cycle to-date.


Upper quartile home values have generally shown the lowest rate of growth over the past year.  This trend is apparent across every capital city except Darwin, demonstrating stronger conditions across the more affordable price points of the market.


“After recording a higher rate of gain through the early months of the growth cycle, conditions have faded across the upper quartile as borrowing capacity reduced and affordability constraints deflected demand towards middle-and-lower-priced properties,” Mr Lawless said.

Across the combined capitals index, upper quartile dwelling values are up 6.7% over the past 12 months compared with a 13.4% gain across the lower quartile of the market.


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