National Housing Market Update [video] | May 2018

Similar to previous months, CoreLogic found that the declines were concentrated within the largest capitals, while regional dwelling values edged 0.4% higher.

On an annual basis, the combined capitals recorded the first decline in dwelling values since late 2012, with values slipping 0.3% lower, driven by falls in Sydney (-3.4%), Perth (-2.3%) and Darwin (-7.7%).

The only capital city to see an improvement in annual growth conditions relative to a year ago is Perth, where the rate of decline has slowed from -3.0% last year to -2.3% over the past twelve months.

A reversal of longer term trends, at a macro level, the latest trends are virtually the opposite of what we have become used to over the past five or so years.

graph of the housing

The past five years has seen combined capital city dwelling values appreciate at the annual rate of 6.8% which is almost double the annual rate across the combined regional markets at 3.5%.

The past twelve months has seen capital city dwelling values fall by 0.3% while regional values are 2.4% higher.

Despite the surge in unit construction over recent years, the past twelve months has seen unit values continue to trend higher, up 1.9%, compared with a 1.0% fall in house values.

More affordable housing stock has been resilient to value falls Across the most expensive quarter of the market, dwelling values have increased at almost twice the pace of the most affordable quarter over the past five years, up 8.2% per annum compared with 4.4% per annum.

Index Results

Trends across capital city sub-regions: Although annual capital gains have slowed to 3.7% across Melbourne, many of the city’s sub-regions still dominate the top 10 for growth in dwelling values over the past twelve months, with six of the top ten located around Melbourne’s outer metropolitan areas. 


The weakest performing sub-regions are now heavily concentrated around Sydney, with eight of the ten weakest performing capital city sub-regions nationally located across the Sydney metropolitan area.

Rental conditions: Nationally, weekly rental rates are now rising at the annual pace of 2.0%, the same rate of growth as a year ago, but slower than seven months ago when the annual pace of growth was tracking at a recent high of 2.9%.

The slowdown in rental growth is once again attributable to slower rental conditions across the capital cities, where annual rental growth has eased from 2.8% in September last year to 1.7% over the twelve months ending April 2018.

With dwelling values now falling or rising at a slower rate than rents, gross rental yields are generally tracking higher.

In the lowest yields markets, Melbourne and Sydney, dwelling rents have lifted from their record lows, but remain well below the long run average.

In Melbourne, gross dwelling yields bottomed out at a record low of 2.88% in November last year and have since crawled higher to reach 2.96%. Sydney Market Down

In Sydney, gross dwellings yields reached a record low of 3.04% in August last year and have showed a subtle repair, rising to 3.21% at the end of April this year.

In Summary, while values are trending lower, CoreLogic confirmed that the rate of decline has remained moderate.

With the Reserve Bank meeting today, it’s virtually guaranteed that the cash rate will remain on hold and the Bank will reiterate a neutral policy stance for the foreseeable future.

While the next interest rate move is likely to be up, financial markets are still indicating the first hike won’t be until July 2019.




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Tim heads up the Core Logic RP Data research and analytics team, analysing real estate markets, demographics and economic trends across Australia. Visit

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