National Home Value Index show sixth consecutive monthly increase
CoreLogic's national Home Value Index (HVI) has posted a sixth consecutive monthly increase, rising by 0.8% in August.
This monthly gain marks a slight acceleration from the 0.7% growth observed in July, interrupting a two-month trend of slowing capital gains. Since reaching its lowest point in February, the national HVI has risen by 4.9%, contributing an estimated $34,301 to the median dwelling value.
The recovery trend in housing values remains broad-based, with every capital city except Hobart experiencing a rise in dwelling values, CoreLogic reported. Brisbane recorded the highest gains with a 1.5% increase, followed by Sydney and Adelaide where home values rose by 1.1%.
CoreLogic research director Tim Lawless (pictured above) said that while the overall trend in housing values is positive, it is also diverse.
“Sydney has led the recovery trend to-date with a gain of 8.8% since values found a floor in January this year. Brisbane has also posted a strong recovery with values up 6.2% since bottoming out in February,” Lawless said. “At the other end of the scale, some other capital cities are better described as flat, with Hobart home values unchanged since stabilising in April, while values across the ACT have risen only mildly, up 1.0% since a trough in April. These are also the only two capital cities where advertised supply is tracking higher than a year ago, suggesting a rebalancing between buyers and sellers is a key factor contributing to the stability of values in these regions.”
Capital cities
In capital cities, the recovery trend has been more pronounced in house values compared to unit values, CoreLogic reported. Since hitting a bottom in February, house values have risen by 6.3% at the combined capital cities level, while unit values have increased by 4.9%. This disparity can be attributed to the larger decline in house values during the preceding downturn, with a drop of -10.7% compared to a -6.5% decline in unit values.
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Sydney stands out as having the most significant difference between house and unit values, potentially due to the substantial decline in house values during the recent downturn (-15%).
Regional markets
Conditions in regional housing markets have been mixed, according to CoreLogic. In the non-capital city regions of New South Wales and Victoria, values decreased by -0.2% and -0.6%, respectively, over the month. However, regional Queensland and South Australia saw solid increases of 0.8% and 0.9%, respectively. Regional Western Australia and Tasmania experienced relatively flat growth, with values rising by 0.1% and 0.0%, respectively.
“With internal migration trends normalising across regional Australia, and less demand side pressures from net overseas migration than in capital cities, regional markets generally aren’t seeing the same level of recovery,” Lawless said.
Historic migration data from the Australian Bureau of Statistics reveals that prior to the pandemic, regional Australia accounted for only around 15% of total net overseas migration, he said.
Among Australia's regional SA3 markets, areas in the Gold Coast and Sunshine Coast dominated the top 10 markets with the largest capital gains over the three months ending in August, CoreLogic reported. Coolangatta experienced a surge in home values, rising by 6.2% over the past three months. This was followed by the Sunshine Coast Hinterland (5.8%) and Gold Coast North (5.6%).
The strong internal migration into these areas is likely a key factor supporting housing demand and values in these regions, Lawless said.
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