Capital city dwelling values up in February

houseDespite what you might hear in the news, house prices continued to rise in all capital cities except Perth and Canberra in February.

According to Corelogic RP Data’s Hedonic Home Value Index dwelling values across Australia’s combined capital cities showed a 0.5% rise in February, pushing dwelling values 1.4% higher over the past three months.

But the strongest performers over the past month weren’t the usual suspects. Hobart, at 2.9%, saw the strongest monthly increase for the month of February, outperforming Adelaide (1.9%) and Brisbane (1.8%).

The country’s most expensive real estate markets, Sydney and Melbourne, also saw house prices go up during the month by 0.5% and 0.3% respectively.

Perth and Canberra were the only capitals that saw house prices fall during February, at -1.1% and -0.2%.

However, while we have seen house prices go up in February, it is almost half of what we saw in 2015, with the annual rate of growth down from a recent peak of 11.1% recorded in July last year.

Over the past year, Melbourne has maintained its number one growth position, with annual capital gains of 11.1%. Sydney’s annual rate of growth has continued to moderate, having almost halved from its cyclical peak of 18.4% recorded in July last year to reach 9.5% growth over the past twelve months.

Despite the Sydney market cooling, it still remains the second best performing capital city over the past twelve months.

The table below, supplied by CoreLogic RP Data, shows the monthly, quarterly and annual price changes across Australia’s capital cities.

corelogic table

According to Mr Lawless, Australia’s capitals are seeing a higher number of new and total property listings relative to the same time last year, which is interesting considering clear evidence of a slowing market over the second half of last year.

“With the number of newly advertised properties moving higher, it seems that vendors have begun 2016 with renewed levels of confidence,” Mr Lawless said.

“Listings in Sydney will be an interesting litmus test for the market’s resilience.

“The number of newly advertised listings across Sydney is 6.8% higher than a year ago while total listings are 22.3% higher than a year ago.”

According to Mr Lawless, the number of homes available for sale is very different in some cities.

“In Melbourne total listings are down -1.2% compared to last year, in Brisbane they are -2.8% lower, in Hobart they are down -12.2% and in Canberra they are -3.1% lower. The lower inventory levels imply less stock to choose from for buyers and consequently stronger selling conditions compared with a year ago. The higher stock levels that are now evident in Sydney, as well as Perth and Darwin, suggest buyers have more homes to choose from and vendors may need to be more flexible in their pricing expectations,” Mr Lawless said.

Many analysts, including Mr Lawless, believe that we will see price growth moderate in many capital cities in the year ahead.