Housing starts the year in good health
CoreLogic RP Data Home Value Index results for January indicate a strong start to 2015 for the housing market, with capital city dwelling values up 1.3 per cent over the first month of the year.
Melbourne recorded an increase in dwelling values of 2.7 per cent over the month and Sydney recorded an increase of 1.4 per cent. Hobart also experienced a strong month, with dwelling values up 1.6 per cent.
Australia’s two largest cities have a large effect on the combined capital city index due to the high number of dwellings in those cities. However, their impact on the aggregate index can mask a decline in values in Australia’s other capital cities. For example, Darwin recorded a decline in dwelling values of -1.3 per cent in January, while Adelaide (-1.2 per cent) and Perth (-0.6 per cent) also recorded a drop.
A clearer picture emerges when looking at the quarterly results to January. The combined capitals recorded an increase in dwelling values of 1.9 per cent over that period, with Hobart (4.4 per cent) edging out Sydney (2.4 per cent) in terms of capital gain. Brisbane (1.8 per cent) and Melbourne (1.5 per cent) also recorded respectable gains in dwelling values. Adelaide and Canberra experienced negligible changes of 0.3 per cent and -0.2 per cent, respectively. However, Darwin experienced a drop of -2.6 per cent during the quarter.
While Sydney has shown the highest aggregated capital growth of any capital in the years since the GFC, Hobart has recorded the lowest rate of capital gain. It makes Hobart’s strong result for the past quarter a “unique occurrence”, says Tim Lawless, CoreLogic RP Data head of research.
“Local economic conditions have been improving and Hobart homes are the most affordable of any capital city,” Lawless says. “Additionally, the market is benefiting from the return of ‘lifestyle buyers’. After Darwin, the southernmost capital is also showing the second-highest gross rental yields of any other capital city.”