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State where property value grows the slowest

 

STOCK IMAGES - HOUSING

Melbourne recorded a 7.7 per cent rise in property values for all dwellings in the past financial year, the lowest growth of every capital. Picture: Daniel Pockett


Melbourne’s house and unit values grew at the slowest rate of every capital city last financial year, new figures show.

And experts say a slowdown in the nation’s housing market is now “clear”.

CoreLogic’s latest Hedonic Home Value Index shows residential property values for all Melbourne dwellings rose 7.7 per cent in the year to June 30.

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STOCK IMAGES - HOUSING

The city’s median value for all homes and units is now $753,100, according to CoreLogic. Picture: Daniel Pockett


House values across metropolitan Melbourne rose 1.8 per cent in the past month and 8.9 per cent over the past 12 months.

Unit growth was more sluggish, with a modest 0.7 per cent value rise in June and a 4.7 per cent increase throughout the financial year.

Melbourne’s median property value for all dwellings is now $753,100, while the median house value is $929,769, and for units it is $610,043.

CoreLogic research director Tim Lawless said the city’s lockdowns had been the primary factor behind the slower growth rate in Melbourne’s dwelling values.

Home values dropped 5.6 per cent during the peak of the Covid-19 crisis last year, he said, but had rebounded 11.5 per cent since the market bottomed out.

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Tighter lending by banks and mortgage rate rises are expected to result in a slowdown in property price growth. Picture: Sarah Matray


While long lockdowns had depressed growth in property values overall, he said the 8.9 per cent annual rise in Melbourne’s house value meant affordability was an issue more than ever.

“We haven’t seen incomes grow by anywhere near that much. So it does mean that affordability in terms of housing prices as measured against incomes has deteriorated,” Mr Lawless said.

CoreLogic’s national head of research Eliza Owen said low mortgage rates continued to drive strong buyer demand, while low stock levels created “urgency” among buyers.

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Despite Melbourne’s modest growth in property values compared to other cities, affordability is still an issue.


National advertised stock levels in June remained 24.4 per cent below the five-year average.

And affordability factors, the potential for tighter lending by banks, and rising mortgage rates had started to take the heat out of the nation’s property market, according to the report.

“Even without recent developments of Covid-19 in Australia, it is clear that the housing market is losing momentum as affordability constraints build,” the report noted.

“Already through June, several of the major banks have forecast cash rate increases earlier than has previously been indicated by the Reserve Bank of Australia. A sooner-than-expected uplift in the cash rate would bring forward mortgage rate rises and reduce demand for credit.”

CoreLogic’s head of research Tim Lawless said the growth in property values still outstripped household wage growth.


Mr Lawless said the market easing would be a good thing for cash-strapped buyers.

Stock levels would further align with demand as more buyers were priced out and vendors continued to list their properties for sale.

This would give more leverage to the remaining buyers, he said.

“I think we will start to see a normalising of listing numbers across next year,” Mr Lawless said.

“This will give negotiating power back to buyers.”

Darwin notched up the biggest annual growth rate in property values of all capital cities at 21 per cent in the financial year.

Hobart had the second largest annual rise, with values there jumping 19.6 per cent.

Melbourne recorded the second biggest number of transactions nationally in the past year, with 89,234 sales.

Sydney had the biggest annual sale volume at 110,064 transactions.

About 582,900 sales were recorded nationally — the biggest annual sale volume since February 2004.

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rebecca.dinuzzo@news.com.au

 

 

Source: State where property value grows the slowest

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