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 CLOSING TOMORROW FRIDAY, SEPTEMBER 12
NOMINATIONS CLOSING TOMORROW URBAN LEADER AWARDS
NOMINATE NOWDETAILS
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
ResidentialFri 01 Jun 18

Melbourne Takes Sydney’s Spot as Nation's Weakest Performing Housing Market

TUD+ MEMBER CONTENT
4e330da2-74c1-45ce-acc9-eea3961d25ca
SHARE
14
print
Print

Regional markets are outperforming capital cities, the market for expensive properties has tumbled and the previously top performing regions are now the among the weakest, according to the May Corelogic Home Value Results report.

Melbourne has taken Sydney’s place as the nation’s weakest performing capital city for the three months to May 2018 with a 1.2 per cent decrease, the largest decline seen in the Victorian capital city for dwelling values over a three-month period since February 2012.

The nation’s dwelling values slipped 0.1 per cent lower in May, taking the annual change (0.4 per cent) into negative territory for the first time since 2012.

Related reading: Apartment Approvals Fell 11.5% Last Month


The negative growth rate is a sign of waning housing conditions across the capital cities, explains Corelogic head of research Tim Lawless, being led by Melbourne and Sydney.

“Sydney and Melbourne comprise approximately 60 per cent of Australia’s housing market by value, and 40 per cent by number, so the performance of these two cities has a larger effect on the headline market performance.”

(Index results as at May 31, 2018) National dwelling values dipped by 0.1 per cent over the month, fueled by weaker conditions in Melbourne and Sydney while regional dwelling values continued to tick higher.


Hobart was highlighted as the best performing capital city with a 3.7 per cent increase over the three months to May and 12.7 per cent higher year-on-year.

While, the top end’s Darwin has the highest rental yield for the same period, at 5.8 per cent.

Perth and Darwin recorded subtle falls in dwelling values, in positive news for both cities dwelling values were up over the same period, in a sign that conditions may be levelling out for what has been trying markets in recent years for both cities.

The report shows the annual rate of decline across Perth, at -1.2 per cent, the smallest annual fall in two years.

Related reading: HSBC Cuts Forecast for Sydney and Melbourne Housing Prices

Hobart’s house prices increased 0.8 per cent for the month, up 12.7 per cent year-on-year.


Regional market strength

Across the top ten performing regional markets is a mix of satellite cities such as Geelong –with dwelling values up 10.2 per cent over the past twelve months – Ballarat and Newcastle, as well as the Sunshine Coast, Southern Highlands, Shoalhaven and Coffs Harbour.

The report says regional housing trends are also now seeing less drag from the mining regions.

Lawless believes the housing market is moving through a carefully managed slowdown due to tighter credit policies, particularly for investors.

“The concentration of investment activity has been heavily skewed towards Sydney and Melbourne, and it’s these cities where market demand has fallen the most. Subsequently both cities have experienced more substantial declines in property values,” he said.

Top and bottom 10 Annual change in dwelling values, regional SA4 areas


While housing market conditions have dampened, Lawless believes values aren’t falling off a cliff any time soon.

“Low mortgage rates are likely to persist for some time yet, and we’re seeing high migration rates supporting housing demand.

Lawless says the falling home values will help affordability for many burdened in the previously ‘hot’ Sydney and Melbourne markets.

“While housing credit growth has slowed, the trends remain positive, especially for owner occupiers where housing credit is up eight per cent. We certainly don’t see dwelling values declining significantly.”

ResidentialAustraliaReal EstateSector
ADVERTISEMENT
TOP STORIES
Exclusive

Newest Land Lease Player Plots Sector Shake-Up

Taryn Paris
5 Min
Waterloo Affordable Mirvac hero
Exclusive

Affordable Housing Rules Tighten as Proposal Deluge Continues

Clare Burnett
5 Min
Exclusive

Beyond the Aerotropolis: How Airports are Turning into Cities

Taryn Paris
6 Min
Exclusive

Inside the Strategy Behind Australia’s Largest Direct Real Estate Deal

Phil Bartsch
5 Min
Exclusive

Green Premium, Brown Discount: New ESG Regulations Drive Value

Patrick Lau
8 Min
View All >
The Avenue Coburg TAFE courtyard HERO
Residential

TAFE Comes Down as Coburg Site Readied for Unit Scheme

Leon Della Bosca
GOLDEN AGE 15 Hay Street Wembley Hill Box Hill South HERO
Residential

Golden Age Moves Ahead with Next Stage of Box Hill Scheme

Leon Della Bosca
Perth Bluerock Rockingham BTR EDM
Build-to-Rent

BtR Specialist Scoops Up WA Site for 200-Home Masterplan

Clare Burnett
Build-to-rent apartment specialist Bluerock acquired the site from the state for a project that would beat its own recor…
LATEST
The Avenue Coburg TAFE courtyard HERO
Residential

TAFE Comes Down as Coburg Site Readied for Unit Scheme

Leon Della Bosca
3 Min
GOLDEN AGE 15 Hay Street Wembley Hill Box Hill South HERO
Residential

Golden Age Moves Ahead with Next Stage of Box Hill Scheme

Leon Della Bosca
2 Min
Perth Bluerock Rockingham BTR EDM
Build-to-Rent

BtR Specialist Scoops Up WA Site for 200-Home Masterplan

Clare Burnett
2 Min
Station Square Wooloongabba HERO
Development

Embattled Gabba Games Site Developer Vows to Fight On

Leon Della Bosca
4 Min
View All >
ADVERTISEMENT
Article originally posted at: https://www.theurbandeveloper.com/articles/melbourne-takes-sydneys-spot-as-weakest-performing-housing-market