Table of contents
Top End Melbourne and Sydney suburbs lead housing value declines - featured image

Top End Melbourne and Sydney suburbs lead housing value declines

Top-end and inner-city suburbs of Melbourne and Sydney are seeing a slip in values as higher fixed mortgage rates, affordability and increased buyer choice impact values at a granular level.

CoreLogic’s quarterly figures confirmed there was a gradual shift from a prolonged period of broad growth to a multi-speed market that differed between capital cities, regions and property types.

The CoreLogic Home Value Index shows national dwelling values rose 2.4% in the first quarter of 2022, which is lower than the same period in 2021 when values increased by 5.8%.

Index Results As At 31 March

High-end and inner-city areas are emerging as the first suburbs to experience this shift in market conditions.

It is likely that slightly tighter lending conditions and higher average fixed rates are hitting the very top of housing markets first.

These same areas are seeing some of the bigger jumps in advertised stock levels too so as we see new demand for housing in these areas decline buyers have more choice, more time for decision-making, and more power at the negotiating table.

Of the 917 house and unit markets analysed across Sydney through the March 2022 quarter, 354 (or 38.6%) recorded a decline in value.

More than half the declines occurred in house markets.

Quarterly value declines ranged from -7.2% for houses in Beaconsfield, 5km south of Sydney’s CBD, to -0.01% for houses in Gladesville on the city’s lower north shore.

Almost half of the 648 house and unit Melbourne property markets analysed recorded a slip in values in the three months to March (46.8%).

Declines ranged from -6.4% across houses in the inner-city suburb of Cremorne, to a -0.01% fall across houses in Boronia.

At a broader market level, Melbourne had recorded two monthly market declines in four months and suburb movements confirmed the city was shifting into the downswing phase in its cycle.

Quarterly declines have been more skewed towards the inner and inner-east of Melbourne, as higher fixed mortgage rates and affordability constraints may be seeing demand slip from the very top end of the market.

This pattern is mirrored across Sydney, and it’s a pattern that has been observed through previous cycles.

As the housing market cools across Melbourne’s inner city and east, the periphery of the metropolitan is experiencing thriving market conditions.

Units across the suburb of Wyndham Vale saw the strongest quarterly increase in Melbourne house and unit markets, at 6.7%.

The surge in more affordable parts of the city could be a result of homebuyers looking for alternative options after being priced out of more central locations.

Unlike Sydney and Melbourne’s softer conditions, Brisbane and Adelaide continue to shine as Australia’s best performers.

Of the 651 house markets analysed across Brisbane and Adelaide, not a single one saw a quarterly or annual decline in values.

Minor falls in unit markets meant that less than 1% of markets analysed in these cities saw a quarterly decline.

Our smaller capital cities...

Some of the strongest value gains across the Brisbane house markets were south of Brisbane River where quarterly value increases of around 10% were recorded for Acacia Ridge, Capalaba and Yeronga. Housing Choice

Topping the list for Greater Brisbane was Logan Central, where values increased 13.5% in the March quarter.

Conditions across southeast Queensland continue to be supported by strong interstate migration from those relocating from NSW and Victoria and the relatively affordable housing stock.

For those migrating from the southern states, a typical house in Brisbane was $857,000 in March, significantly less than Sydney’s median of $1.4 million.

In Adelaide, the strongest quarterly value gains were in Largs North, Ottoway and North Haven, close to trendy breweries and beaches.

The stellar performance across Adelaide reflects the high, ongoing demand across the state, positive trends in interstate migration, relatively affordable dwelling values, and low levels of advertised stock.

CoreLogic’s median dwelling value for Adelaide was $602,000 at the end of March, making it the country’s third most affordable capital city behind Perth and Darwin. Property Supply

Canberra saw 5.2% of markets analysed to see a quarterly decline in values. Unlike other capital cities, the strength of the Canberra market was most evident in the unit segment, where not a single suburb saw a fall in unit declines over the quarter or year.

The strength of Canberra’s unit market to relative affordability compared to the housing segment, as well as increased investor participation in housing markets, as rents rise and units generally offer better gross rent yields.

CoreLogic analysed 55 house and unit markets across Hobart for the March quarter, with 10.9% of suburbs recording a decline in values.

Tasmania’s many tailwinds supported the market for long-term capital growth.

While migration trends to the state have not been as favourable since the onset of COVID-19, eased travel restrictions may see a more robust return in domestic and international tourism, which would support economic conditions, and likely further tighten the rental market.

This beautiful state still poses inviting opportunities for retirees and tree-changers, with dwelling values sitting relatively low compared with nearby southern states.

Across Perth and Darwin, the portion of markets seeing a quarterly decline was 13.4% and 18.0% respectively.

Despite seemingly high instances of quarterly value falls, these markets overall have enjoyed decent value gains in the March quarter.

Across Perth, value gains were strongest in Wannanup units, up 9.3% in the quarter, while the top house market was Forrestdale, with gains of 5.3%.

About Eliza is head Of Residential Research Australia for Corelogic and a respected property market commentator. Eliza holds a first class honours degree in economics from the University of Sydney
No comments


Copyright © Michael Yardney’s Property Investment Update Important Information
Content Marketing by GridConcepts