Melbourne remains the lowest yielding market for houses, averaging 2.9%.
Melbourne dwelling values have been rising for the same length of time and have moved 41% higher over the growth cycle to date.
The combined capitals’ headline result was driven by a strong 1.2% rise in Sydney dwelling values, and a 0.8% gain across Melbourne’s housing market.
Based on the CoreLogic Index results over the first six months of the year, capital city dwelling values have moved 5.5% higher during 2016, with one of the most substantial capital gains located in Melbourne (5.8%).
Rental yields are generally low across all of the capital cities, however, it is only in Sydney and Melbourne where yields for both houses and units have dropped to new record lows.
Overall, the strong housing market conditions in Sydney and Melbourne are being reported in-line with high auction clearance rates and resilient levels of mortgage related activity and are also supported by a robust level of consumer confidence.
Auction results in Melbourne have been tracking consistently in the low 70% to high 60% range week to week in 2016.
Additionally, the Westpac-Melbourne Institute measure of consumer sentiment remained in positive territory during June, after surging in May.
Melbourne shows a healthier affordability index compared with Sydney, however, dwellings prices remain 6.8 times higher than household incomes