Property research group CoreLogic has released its Hedonic Home Value Index for December 2019, which revealed a 1.1 per cent rise in dwelling values in December, totalling a 4.0 per cent increase in values in the three months ending December 2019.
The growth achieved in the December quarter is reportedly the fastest rate of national dwelling growth over any three-month period seen since November 2009, according to CoreLogic.
However, despite a strong rebound in the second half of 2019, national property values are still sitting below their previous record highs.
The CoreLogic index recorded its peak in October 2017, and national dwelling values were still 3.1 per cent below that peak, as of the end of 2019.
However, the property research group anticipates that, should the current rate of growth continue into 2020, the national housing market will record a nominal recovery in March, as dwelling values push to new record highs.
Sydney achieved the highest rate of growth in the December quarter, with an increase in dwelling values of 6.2 per cent.
Darwin was the lowest-performing of the capital cities, reporting a 1.4 per cent decrease in dwelling values in the three months ending December 2019.
Commenting on the December results, CoreLogic head of research Tim Lawless said the rate of growth in national dwelling prices has already started to subdue.
“Although the monthly capital gains trend remains fast-paced, the 1.1 per cent rise in December was softer relative to the 1.7 per cent gain in November and the 1.2 per cent rise in October.
“This would suggest that the pace of capital gains may have been dampened by higher advertised stock levels or worsening affordability pressures through early summer,” Mr Lawless said.
He continued: “The positive year-end results mask what has been a year of two distinct halves – we saw capital city dwelling values fall by 3.8 per cent over the first six months of 2019 and then rebound by 7.0 per cent over the second half of the year.”
He continued: “The housing value rebound was spurred on by lower mortgage rates, a relaxation in borrower serviceability assessments, improved housing affordability and renewed certainty around property taxation policies post the federal election.
“Lower advertised stock levels persisted, providing additional upwards pressure on prices amidst rising buyer activity.”
Mr Lawless also commented on the looming market recovery, which will see house prices return to their October 2017 highs, if not exceed them.
“A nominal recovery in housing values implies home owners are becoming wealthier, which may also help to support household spending,” he said.
“However, the flip side is that housing affordability is set to deteriorate even further as dwelling values outpace growth in household incomes, signaling a setback for those saving for a deposit.”
Hannah Dowling is a journalist for mortgage business, the leading source of news, opinion and strategy for professionals working in the mortgage industry.
Prior to joining the team at Mortgage Business, Hannah worked as a content producer for a podcast catering to property investors. She also spent 6 years working in the real estate sector at a local agency.
Hannah graduated from Macquarie University with a Bachelor of Media and Journalism.