The September results confirmed that dwelling values edged 0.2% higher across Australia over the month, led by a 0.3% rise in capital city values and a 0.1% gain across the combined regional markets.
The combined capital city trend growth rate is clearly losing steam with dwelling values rising by 0.7% over the September quarter and well down from the recent peak rate of quarter-on-quarter growth which was recorded at 3.5% over the December 2016 quarter.
This slowing in the combined capitals growth trend is heavily influenced by conditions across the Sydney market where capital gains have stalled.
Dwelling values were almost 1% higher over the month of September and rose by 2.0% over the September quarter.
The stronger housing market conditions in Melbourne are supported by auction clearance rates which have consistently remained above 70%.
Additionally, advertised stock levels remain remarkably low and private treaty sales continue to sell rapidly, averaging 30 days on market.
Across the regional areas of Australia, growth rates have generally been lower compared to capital cities performance.
The combined regional housing markets saw dwelling values unchanged over the September quarter compared with a 0.7% rise in capital city dwelling values.
Similarly, over the past twelve months regional values were 5.6% higher compared with an 8.5% rise in capital city values.
More in-depth area analysis of the CoreLogic September home value results showed that growth rates have been remarkably strong in some regional markets, particularly those adjacent to the Sydney metro area.
The strongest regional performer was the Newcastle and Lake Macquarie SA4 region, where values were 15.3% higher over the past twelve months.
Southern Highlands and Shoalhaven (+14.3%) and Illawarra (+13.5%) rounded out the top three regional markets based on the 12 month change in dwelling
The past twelve months has seen this annual pace of rental growth ramp up to be 2.8% over the twelve months ending September.
The more subdued housing market conditions now playing out are likely the result of a combination of factors, namely, the clamp down on investment and interest only lending which is likely to have a knock on effect for the Sydney housing market more than any other city.
As we’ve seen from the latest housing finance data, investors still comprise slightly more than 50% of mortgage demand across New South Wales; a higher proportion than any other state.
Investment mortgage rates are generally showing a 60 basis point premium over owner occupier rates, and premiums are higher for interest only loans.
First home buyer numbers are trending higher across other states where stamp duty rules were unchanged, suggesting that lower affordability barriers and an increasing appetite for owner occupier lending is fueling a broader rebound across the first time buyer segment.
While CoreLogic anticipates that dwelling values will trend lower across Sydney and potentially Melbourne later this year or next, strong demand for housing, along with mortgage rates anticipated to remain low, will help to support a floor under housing prices going forward.
SUBSCRIBE & DON'T MISS A SINGLE EPISODE OF MICHAEL YARDNEY'S PODCAST
Hear Michael & a select panel of guest experts discuss property investment, success & money related topics. Subscribe now, whether you're on an Apple or Android handset.
PREFER TO SUBSCRIBE VIA EMAIL?
Join Michael Yardney's inner circle of daily subscribers and get into the head of Australia's best property investment advisor and a wide team of leading property researchers and commentators.