State by State Property Market Review : 2017-18 Financial Year

In this Pulse we delve into how national housing markets have performed in terms of value growth in the 2017-18 financial year and how it stacks up against previous years. Australia Market

The first chart highlights the change in dwelling values nationally across each financial year from 1997-98 t0 2017-18.

In the most recent financial year, dwelling values fell by -0.8% which was the largest fall in values over a financial year since 2011-12 (-3.0%).

The fall in values over the year was a significant contrast to the 10.2% increase in values over the 2016-17 financial year.

2018 07 09 Annualchangeinnationalvalues

Dwelling values fell by -1.6% over the 2017-18 financial year across the combined capital cities.

This represented the largest fall since 2011-12 (-3.0%) and it was a substantial slowdown compared to the 11.1% increase in values over the 2016-17 financial year.

Last financial year was one of only four financial years over the past two decades in which capital city values have fallen.

2018 07 09 Capitalvsregional

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Although combined regional market dwelling values increased by 2.2% over the 2017-18 financial year, the rate of growth was much slower than the 6.4% the previous year.

Regional dwelling value growth last year was the slowest it has been since 2012-13 when values increased by just 0.9%.

Regional markets have only seen three years out of the past 20 in which values have fallen over the financial year.

Sydney

Sydney dwelling values fell by -4.5% over the 2017-18 financial year which was their largest financial year fall in over 20 years.

In fact, looking at data which goes back to 1980-81 financial year, this is the weakest financial year for growth in Sydney dwelling values over that period.

The slowdown in Sydney dwelling value growth is stark when considering that a year earlier values had increased by 16.4% over the financial year.

2018 07 09 Nswannualchange

Dwelling values were 3.2% higher over the 2017-18 financial year in regional NSW.

Like Sydney, there has been a significant slowdown in growth over the year compared to the 11.9% increase the previous year.

In fact, the 3.2% increase was the slowest financial year growth since 2012-13.

Melbourne

Over the 2017-18 financial year, Melbourne dwelling values increased by 1.0%.

Although values rose for the sixth consecutive financial year, it was the slowest rate of growth out of any of those six years and well down on the 13.0% increase over the 2016-17 financial year.

2018 07 09 Vicannualchange

Throughout regional Vic dwelling value growth actually accelerated throughout the financial year from an increase of 4.8% in 2016-17 to 5.0% in 2017-18.

The 5.0% increase in values over the year was the greatest financial year increase in values since 2010-11 when values rose by 6.1%.

Brisbane Value 300x200

Growth in Brisbane dwelling values has slowed over each of the past two financial year with an increase of 1.1% in 2017-18.

The change in values over the most recent financial year is the lowest since values fell by -3.6% over the 2011-12 financial year.

Although the rate of value growth slowed, values have increased over each of the past six financial years.

2018 07 09 Qldannualchange

Regional Qld dwelling values rose by 0.3% over the 2017-18 financial year compared to a 3.5% rise the previous year.

Although values barely moved, values in regional Qld have now risen over each of the past six financial years.

This has occurred despite the drag from ongoing value falls in many tourist and resources linked regions of the state.

Adelaide

Adelaide dwelling values increased by 1.1% over the 2017-18 financial year, marking the 5th consecutive year in which values have increased.

Although values increased over the year, it was the slowest rate of change for the city since values fell -0.4% in 2012-13.

2018 07 09 Sachangeinvalue

Values in regional SA fell by -0.1% over the 2017-18 financial year.

This marked the third consecutive financial year in which values had fallen however, the rate of decline was the lowest over this period and up from a -0.5% fall in 2016-17.

Perth

Perth dwelling values fell by -2.1% in 2017-18 which represented a slowing of value declines from the -2.6% fall in 2016-17.

Although values have now fallen for four consecutive financial years, declines over the most recent year were the most moderate of those four years.

2018 07 09 Waannualchange

Dwelling values in regional WA fell for the sixth consecutive financial year in 2017-18.

Values declined by -3.3% in 2017-18 which was a steeper fall than the -2.2% the previous year but a much more moderate fall than the -9.5% in 2015-16.

Hobart

Hobart dwelling values increased by 12.7% over the 2017-18 financial year which was marginally lower than the 12.8% over the previous financial year.

Dwelling values in Hobart have now increased for five consecutive financial years however, the past two years have seen the strongest growth since 2003-04.

2018 07 09 Tasannualchange

Dwelling values in regional Tas increased for the fifth consecutive year in 2017-18, up 5.6%.

Although values increased over the year, the rate of growth was marginally lower than the 6.4% rise in values over the 2016-17 financial year.

Darwin

For the fifth consecutive financial year, dwelling values in Darwin have fallen, down -7.7%.

The rate of value decline over the past financial year was much greater than the -2.6% in 2016-17 however, it was slightly lower than the -8.0% decline in 2015-16.

2018 07 09 Ntannualchange

In regional NT dwelling values rose by 4.8% in 2017-18 which was a substantial improvement on the -7.0% fall over the previous financial year.

Canberra

The rate of value growth in dwelling values in Canberra fell from 7.8% in 2016-17 to 2.3% in 2017-18.

Although value growth slowed over the past year, Canberra dwelling values have now increased over four consecutive years following falls in three of the previous four financial years.

2018 07 09 Canberraannualchange

Across most regions of the country, dwelling value growth over the 2017-018 financial year slowed compared to the previous year. australia

Unlike previous downturns, the slowing of value growth was not precipitated through movements in the cash rate.

Independent increases to the cost of borrowing, particularly for investors, tighter credit conditions and a lack of real wage growth which has led to reduced affordability are some of the main drivers of the weakening housing conditions.

Looking forward to the 2018-19 financial year, the factors which contributed to the slowing growth in 2017-18 seem unlikely to be removed over the coming financial year which may result in even weaker value changes over the coming year.

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About

Cameron Kusher is Corelogic RP Data’s senior research analyst. Cameron has a thorough understanding of the fundamentals such as demographics, trends & economics. Visit www.corelogic.com.au


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