Regional markets showing ‘substantial’ LVR variability

Fresh figures from CoreLogic and Equifax have revealed that average application LVRs in regional housing markets are exhibiting high levels of variation across mining and coastal towns.

The second application LVR index from Equifax and CoreLogic released earlier this week showed a “substantial level of variability” across regional housing markets.

The figures indicated that most averaged application LVRs of over 80 per cent, and many have LVRs of over 90 per cent.

Based on data to the end of April 2017, the index showed that while LVRs increased in mining and agricultural regions, they decreased in coastal regions and satellite towns.

Commenting on the figures, CoreLogic Asia Pacific head of research Tim Lawless pointed out that the majority of areas with very high application LVRs are linked to the resources or agricultural sectors.

“In these areas, such as Gladstone, Darling Downs and Murrumbidgee, loan application amounts are high, relative to the dwelling prices. Weaker housing market conditions are also a key factor, with many of the mining regions seeing dwelling values fall in excess of 30 per cent since 2013/14,” Mr Lawless said.

“Regional markets with the lowest application LVR tend to be the satellite cities and coastal lifestyle markets. Satellite cities like Wollongong have benefited from a spill over of housing demand, which has pushed up housing values.

“Many coastal regions have been impacted by equity-rich buyers seeking out holiday homes and retirement options,” he concluded.

In terms of the national average, the index showed a continuing downward trend in application LVRs.

The results also showed that the average has decreased from 74.3 per cent in September 2016 to 73.4 per cent in April 2017.

[Related: Housing growth ‘not confined’ to major cities: HIA]

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Francesca Krakue

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