The last month of winter saw the housing market correction deepen, with dwelling values falling across five of Australia`s eight capital cities.
CoreLogic`s national index was down theree tenths of a percent over the month taking the cumulative decline since values peaked in September last year to 2.2%.
Over the year to date, national dwelling values are down 1.9%, however, the weakest performing cities have been Sydney and Melbourne where dwelling values were previously rising the fastest, but have now fallen 3.5% and 3.3% respectively over the first eight months of the year.
Considering the sheer size of the cities; Sydney and Melbourne comprise approximately 60% of Australia`s housing market by value, and 40% by number, the weaker performance in these cities has a significant drag down effect on the combined capitals and national reading of the market.
Hobart stands out as showing the highest rate of capital gain so far this year with dwelling values up 5.6%.
Values have trended higher in Brisbane, Adelaide and Canberra over the year to date but are lower in Perth and Darwin as well as Sydney and Melbourne.
The overall housing market weakness is heavily concentrated across the premium sector of the market.
CoreLogic recorded a 5.4% fall in values across the upper quartile of the combined capitals over the past twelve months, while the broad middle of the market is down 0.5% over the year and the most inexpensive quartile has recorded a 0.6% rise in values.
This trend towards weaker premium housing market conditions is lardely attributable to larger falls across Sydney and Melbourne`s most expensive quarter of properties where values are down 8.1% and 5.2% over the past twelve months.
Melbourne is showing the most significant variation across the broad valuation segments, with the most affordable quarter of the market recording a 6.0% rise in values over the past year, while the most expensive quarter is down 5.2%.
The trend towards more robust housing market conditions for affordable properties can be seen heographically as well, with the top ten capital city sub-regions, based on an annual capital gain, generally located in more affordable areas such as Hobart, the outskirts of Melbourne and parts of Brisbane and Adelaide.
On the other hand, the weakest performing sub-regions are primarly located across Sydney as well as Melbourne`s prestigious Inner East.
Stronger market conditions across Australia`s more affordable areas are likely attributable to a rise of first home buyers in the market as well as changing credit policies focused on reducing exposure to high debt-to-income ratios.
In the higher value cities like Sydney and Melbourne, we`re seeing typical dwelling prices remain more than 8 times higher than median household incomes, suggesting tighter credit conditions for borrowers with a high debt-to-income ratio will likely impact on demand more in these cities over others.
The regional markets have also continued to weaken, with values slipping lower for the second consecutive month across the combined rest of state index to be down 02.% over the month and 0.6% lower over the rolling quarter.
Regional areas of the mining states continue to deliver the most significant drag on the headline growth rates, with values down 3.5% over the past three months across regional WA and 1.0% lower across regional Queensland.
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