Capital city dwelling values rise

Capital city dwelling values riseAustralia’s capital city dwelling values have ended the 2013-14 financial year 10.1 per cent higher, according to RP Data Rismark’s June Hedonic Home Value Index.Index results as at 30 June show that capital city dwelling values recorded a capital gain of 1.4 per cent for the month of June after posting a 1.9 per cent decline in May. All of Australia’s capital cities recorded a gain in dwelling values, apart from Adelaide and Darwin.Melbourne and Sydney were the strongest performers in June with 1.8 per cent and 1.7 per cent gains, respectively. And both cities recorded strong increases in capital gains over the 2013-14 financial year, with Melbourne experiencing an increase in dwelling values of 9.4 per cent, and Sydney 15.4 per cent.The Brisbane housing market recorded the third strongest result of the capital cities with dwelling values climbing 7.0 per cent over the past 12 months.RP Data says month-to-month index results have been volatile recently and the trend in performance offers a better indicator of housing values. Index results show the quarterly rate of growth peaked across the Australian housing market in August last year at 4.0 per cent. Since then, the rate of capital gain has trended towards a more sustainable level. RP Data says the slowdown in dwelling value depreciation is welcome relief to policymakers and those looking to buy their first home.In terms of total returns, Sydney has been the top performer over the past financial year with returns of 20.2 per cent. Melbourne, Darwin and Brisbane all recorded total gross returns slightly in excess of 12 per cent.Looking to the foreseeable future, RP Data says housing values are unlikely to decline while interest rates remain low. More likely, it says, is that natural affordability constraints will start to dent buyer demand, as will low rental yield environments currently evident in Melbourne and Sydney.For more on the June RP Data-Rismark Home Value Index, go to: www.rpdata.com/research/australias-capital-city-dwelling-values