The Urban Developer
AdvertiseEventsWebinarsUrbanity
Industry Excellence
Urban Leader
Sign In
Membership
Latest
Menu
Location
Sector
Category
Content
Type
Newsletters
Urban Leader Awards Logos RGB White
NOMINATIONS CLOSE IN ONE WEEK RECOGNISING THE PEOPLE BEHIND THE PROJECTS
NOMINATIONS CLOSING NEXT WEEK URBAN LEADER AWARDS
LEARN MOREDETAILS
TheUrbanDeveloper
Follow
About
About Us
Membership
Awards
Events
Webinars
Listings
Resources
Terms & Conditions
Commenting Policy
Privacy Policy
Republishing Guidelines
Editorial Charter
Complaints Handling Policy
Contact
General Enquiries
Advertise
Contribution Enquiry
Project Submission
Membership Enquiry
Newsletter
Stay up to date and with the latest news, projects, deals and features.
Subscribe
ADVERTISEMENT
SHARE
9
print
Print
ResidentialDinah Lewis BoucherMon 03 Feb 20

Australia’s House Prices Rise Amid Slower Pace of Growth

4bb086c0-76ee-4fd8-91be-f3725d444e68

Australia’s house prices continued its upward climb in January, increasing across every capital city, amid a slower pace of growth.

Corelogic’s national home value index increased by 0.9 per cent for the first month of the year, taking the annual growth rate to 4.1 per cent.

Sydney and Melbourne lead the capital city growth, up 1.1 per cent and 1.2 per cent in January, following price declines experienced in the recent market downturn.

Factoring in January's seasonal affect, Corelogic's Tim Lawless says the latest results indicate “a reduction in the speed of growth across most markets”.

“Especially for Sydney and Melbourne where affordability constraints are once again becoming more pressing,” Lawless said.

“As advertised stock levels rise over the early part of the year, we could see further dampening of growth rates.”

Corelogic's house price index

MonthQuarterAnnualTotal ReturnMedian Value
Sydney1.1% 5.6%7.9%11.5% $862,814
Melbourne1.2%4.9%8.2%11.7%$681,925
Brisbane0.5%2%1.1%5.6%$499,691
Adelaide0.2%1.3%0.4%4.9% $437,411
Perth0.1%0.4%-5.7%-1.7%$440,965
Hobart0.9%3.4%5%10.5%$481,665
Darwin0.1%-1.6%-8.1%-0.4%$390,143
Canberra0.3%2%3.1%7.9%$630,078
Combined Capitals0.9%4.2%5.2%8.8%$632,408
National0.9%3.7%4.1%8.1%$545,622

^ Index results as at January 31 2020: Corelogic

Housing values increased across every capital city and region in January, with exception to regional South Australia.

Across the country, housing values have now recovered 6.7 per cent since hitting a floor in June last year, although Corelogic notes that its national index remains 2.2 per cent below 2017 October peak.

“Despite the seasonality, there is evidence to suggest that housing value growth rates are tapering in Sydney and Melbourne,” Lawless said.

“Although with values rising at more than 1 per cent month-on-month, this pace is still unsustainable considering household income growth is sluggish and housing affordability challenges are worsening.”

The data shows that Perth's housing values are slowly recovering from the five-and-a-half year slump, with values posting a slight 0.1 per cent rise in January, and a lift of 0.4 per cent for the quarter. Although Perth's housing values are still 21.3 per cent below their 2014 peak.

▲ Corelogic data says four of Australia’s eight capital cities are showing home values 'at new record highs', Brisbane, Adelaide, Hobart and Canberra.


Further rate cuts, fuel to the housing market?

The RBA, which slashed the cash rate to a record low of 0.75 per cent last year, will meet for its interest rate decision on Tuesday.

While money markets expect the RBA to hold this week, some economists have forecast the cash rate to hit 0.5 per cent by mid-year – just one cut from the 0.25 point where the RBA said it would consider a quantitative easing program.

Last month, AMP economist Shane Oliver said he expects the RBA to cut the cash rate to 0.5 per cent in February with rates down to 0.25 in March, and “quantitative easing likely from mid-year,” Oliver notes.

Capital Economics forecasts house price growth to slow from 8 per cent this year to 5 per cent next year. The research house also expects the Reserve Bank of Australia to cut interest rates twice in 2020.

“Indeed we think annual house price growth will reach 10 per cent by the middle of the year. However, there are now tentative signs that this will mark the peak in price growth,” Capital Economics economist Ben Udy said.

CBA Economics expects national dwelling prices to rise by 6 per cent this year. While ANZ revised up its forecasts last week, saying it expects an 8 per cent rise on average through 2020.

OtherBrisbaneMelbournePerthAdelaideCanberraAustraliaReal EstateResearch
AUTHOR
Dinah Lewis Boucher
More articles by this author
ADVERTISEMENT
TOP STORIES
Exclusive

Arup Targets Podium Finish for Brisbane CBD Headquarters

Taryn Paris
6 Min
Exclusive

No Cookie Cutters: Finding Feasibility in HAFF Projects

Patrick Lau
6 Min
Exclusive

Brisbane Transaction Activity Steams Ahead for A-Grade Residential

Taryn Paris
5 Min
Exclusive

Starchitect Ivan Harbour on the Power of Small Spaces

Taryn Paris
6 Min
Stockland bumps up its apartment pipeline in melbourne and sydney
Exclusive

Stockland Re-Enters Density in $5bn Apartment Play

Renee McKeown
4 Min
View All >
Sponsored

What a 4.5-Star iCIRT Means for Modern Construction

Partner Content
Canberra Tradesmen's Union Club rendering
Residential

Canberra ‘Tradies’ Club Puts Forward 645-Unit Precinct

Leon Della Bosca
Simplicity Living is expanding its build-to-rent arm with plans to build 600 homes in Queenstown as the development industry looks to a light at the end of the “tough times” tunnel.
Build-to-Rent

NZ’s Simplicity Plots $500m Queenstown BtR Scheme

Renee McKeown
Simplicity’s plans for the undersupplied ski town have been welcomed as green shoots appear for development in Aotearoa.…
LATEST
Construction

What a 4.5-Star iCIRT Means for Modern Construction

Partner Content
3 Min
Canberra Tradesmen's Union Club rendering
Residential

Canberra ‘Tradies’ Club Puts Forward 645-Unit Precinct

Leon Della Bosca
3 Min
Simplicity Living is expanding its build-to-rent arm with plans to build 600 homes in Queenstown as the development industry looks to a light at the end of the “tough times” tunnel.
Build-to-Rent

NZ’s Simplicity Plots $500m Queenstown BtR Scheme

Renee McKeown
3 Min
Mirvac is launching its Everdene, Mulgoa community for 1200 homes with lots ranging from 200sq m small lots to 2000sq m rural lots this month.
Residential

Mirvac Takes Covers Off $1.2bn Western Sydney Masterplan

Renee McKeown
2 Min
View All >
ADVERTISEMENT
Article originally posted at: https://www.theurbandeveloper.com/articles/australias-house-prices-rise-corelogic