House prices have recorded the smallest monthly decline in value since May, falling 0.1 per cent as buyer sentiment and confidence rises.
It is the fifth month of decline, with September’s national Corelogic home value index weighed down by Sydney and Melbourne which account for 40 per cent of the nation’s housing volume, and 55 per cent of its value.
Combined capital values dropped by 0.2 per cent, with Melbourne and Sydney dragging the Australian market down while the remaining capitals recorded a lift through September.
Regional values continue to make gains, jumping 0.4 per cent as buyers look further afield for value, remote work and lifestyle benefits.
There was also a striking turn in the housing market in September as sentiment and consumer confidence increased, new listings rose, and six of the eight capital cities recorded a rise in home values over the month.
Corelogic home prices
^ Source: Corelogic, as at 30 September 2020
Corelogic head of research Tim Lawless said Melbourne remains the main drag on the headline results.
“By far the weakest result across the capital cities, Melbourne housing values were down 0.9 per cent in September,” Lawless said.
“Since peaking in March, Melbourne values are down 5.5 per cent.
“With restrictions starting to lift and private home inspections once again permitted, we expect to see activity lift in October.”
A similar result was seen in new home approvals, which dropped 1.6 per cent in August nationally, however, private sector houses were up in all states except Victoria and NSW.
Meanwhile for investors, the Reserve Bank expects rental growth to remain subdued through 2021 as restrictions on international migration affect vacancy rates.