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According to the February 2016 CoreLogic RP Data Hedonic Home Value Index results released 1st March, dwelling values across Australia’s combined capital cities showed a slight rise of 0.5% rise in February, pushing dwelling values 1.4% higher over the past three months.
In February, home values rose across each capital city with the exclusion of Perth and Canberra. Over the past three months, dwelling values have increased across all capitals except Sydney (-0.2%). The largest monthly increases in home values were recorded in the cities that have been underperforming over the growth cycle to date; Hobart, Adelaide and Brisbane dwelling showed the highest growth rates with Brisbane recording a 1.8% increase in the month. It has now delivered a 2.0% increase across the rolling quarter, 5.5% increase YOY and a total gross return of 10.3%.

Whilst Brisbane’s growth numbers are very encouraging, it continues to attract a lot of interest from interstate investors due to its median dwelling price of now $474,500. This has always been an attractor for most investors when you consider Sydney’s median price of $730,000 in the latest figures.
Md of PPI Advice Josh Atherton stated that “Although the signs are encouraging for investors in both Hobart, Adelaide and Brisbane, these figures are only one element of a vast and diverse undertaking of analysis that every investor should consider before investing. The trends are what investors consistently look for and to stay ahead of the curve is key with any investment, especially property”. We can start to see trends after three months and taking into consideration the usual 6 month lag effect, we generally look at 6-12 month rolling averages to feel comfortable with trends being accurate.

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According to CoreLogic RP Data head of research Tim Lawless, “Even though home values have trended lower over the year in Perth and Darwin, they have recorded value rises of 0.2% and 0.3% respectively over the past three months.”

Dwelling values are still increasing across most capital cities however, the results remain diverse. Sydney and Melbourne remain the strongest markets in trend terms, however, the gap is widening between the performances of Melbourne relative to Sydney.

Over the past 12 months, combined capital city home values have increased by 7.6%, with the annual rate of growth down from a recent peak of 11.1% recorded in July last year. Melbourne has maintained its number one growth position, with annual capital gains of 11.1%. Mr Lawless said, “Melbourne values appear to be holding reasonably firm since December last year with the annual rate of capital gain virtually level over the past three months.”

Sydney’s annual rate of growth has continued to moderate, having almost halved from its cyclical peak of 18.4% recorded in July last year to reach 9.5% growth over the past twelve months. Despite the slowing trend, Sydney remains the second best performing capital city over the past twelve months, however, Mr Lawless said, “a few of the smaller cities, where growth rates have recently accelerated, may start to rival Sydney’s position over the coming months.”

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