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The CoreLogic Home Value Index for January 2017 shows that Hobart experienced the greatest increase in monthly dwelling values, up 1.4 per cent on December’s figures and 5.8 per cent over the three months to the end of January.
Sydney and Melbourne also performed strongly, with the NSW capital recording an increase of 1 per cent in January and the Victorian capital seeing a 0.8 per cent rise. Over the rolling quarter Sydney has seen dwelling values rise by 2.7 per cent while Melbourne properties have risen in value by 2.4 per cent.
Brisbane and Perth have seen dwelling values rise by a marginal 0.1 per cent and 0.2 per cent over the month (respectively), however Perth has outperformed the Queensland capital by one percentage point on a quarterly basis (to 2.1 per cent).
The value of dwellings in Adelaide rose by 0.5 per cent in the month ending 31 January, bringing the quarterly value increase to 1.4 per cent.
While Darwin has seen a quarterly increase of 1.8 per cent in dwelling values, the month between the end of December and the end of January saw values drop by 1.7 per cent.
Overall, capital city dwelling values posted a 0.7 per cent rise over the month, a 2.3 per cent rise over the quarter and a 10.7 per cent rise on the year.
Commenting on the January results, CoreLogic head of research Tim Lawless said: “While the pace of capital gains remained strong in January, our view is that growth rates will trend lower over 2017, with several factors likely to dampen the strong capital gains trend...
“While mortgage serviceability remains reasonably healthy, mortgage rates are already edging higher on the back of higher funding costs, which could progressively take some heat out of investment demand. In addition, with house prices continuing to increase, the supervisory focus from APRA and risk committees can only be expected to increase in 2017, suggesting a continued trend towards tighter credit policies amongst regulated institutions.”
He added: “Dwelling approvals have already peaked across the high rise sector, as have construction commencements. However, the unit supply pipeline remains at unprecedented levels with a large proportion of these high rise units located within the inner city regions.
“As these units flow through to settlement, the risk of buyers receiving a finance shock is becoming heightened.”
Mr Lawless concluded: “While growth rates are likely to slow over the year, low mortgage rates and strong population growth are likely to keep a floor under housing demand.”
[Related: Capital dwelling growth surges in 2016]