Home Property Australia Strong capital gains trends continue

Strong capital gains trends continue

  • August 11, 2014

Strong capital gains trends continueSydney, Melbourne and Canberra continue their strong capital gains trend, with dwelling values across capital cities nationally up 1.1 per cent in the past quarter.RP Data-Rismark July Hedonic Home Value Index results show the aggregate capital gain across the combined capital cities to be 5.0 per cent for the year to date. Dwelling values in Sydney, Melbourne and Canberra rose 2.0 per cent, 1.8 per cent and 2.1 respectively.Generally, capital city dwellings have trended higher since June 2012, with the combined capitals index recording a cumulative gain of 17.4 per cent. In Sydney, values have moved almost 25 per cent higher over that period.According to the results, capital city dwelling values moved 3.7 per cent higher compared with a peak of growth of 7.2 per cent recorded over the six months to November last year. Over a similar time frame, growth in mortgage demand has started to ease.In the three months to July, the best-performing capital city was Canberra at 2.1 per cent. Darwin houses recorded the highest gross rental yields, at 5.9 per cent, and gross rental yields for Darwin units reached 5.8 per cent.Housing market results across broad price segments revealed that the most expensive quarter of the combined capital city housing market has shown the highest capital gains over the past year. Dwelling values went up 10.8 per cent over the past 12 months, compared with a 7.9 per cent gain across the most affordable quarter of the market and a 10.1 per cent gain across the broad middle of the market.The RP Data Rismark Accumulation Index combines the level of capital gain with gross rental returns. It shows a 14.7 per cent total return over the past 12 months, with Sydney in the lead at 19.5 per cent followed by Melbourne at 14.9 per cent.According to the RP Data research director, the housing market is set to record further capital gains but it’s likely that growth rates will continue to taper off to a more sustainable level. Capital gains will continue into the foreseeable future, with interest rates remaining low and fixed interest rates seeing further downward pressure.To download the full report, visit http://www.rpdata.com/research/sydney-and-melbourne-continue-to-drive-two-tier-housing-market-conditions-in-july.html