Overall, the value of homes across various regions of Australia has been lower than usual lately. However, in May 2019, the statistics started to turn, according to Core Logic, with the rate of declines easing to a slower pace. At a national level, the value of homes went down by only 0.4% in May, which is the smallest decline the country has seen since the same time last year (2018).
Tim Lawless, the head of research for CoreLogic, commented on the market and noted that housing prices had been falling particularly quickly in Melbourne and Sydney up until recently. As the homes in the capital city started to regain strength, the worth of dwellings overall began to balance out too. This May, Sydney's values fell by 0.5%, while Melbourne values fell by only 0.3%.
In other cities, where the housing market has remained resilient despite an economic downturn, the reduction in value hasn't been so bad. Values for homes in Hobart have fallen for two months in a row now, taking the quarterly rate of change into negatives for the first time since 2016. Additionally, the Canberra values have been around 0.2% lower during the Spring, leading the quarterly growth rate to be only just edging over into positive territory.
What's Happening in the Latest Reports?
According to the latest housing value reports, Adelaide is currently the only city that didn't see a reduction in housing values throughout May. Additionally, rest-of-state areas like Tasmania, South Australia, and the Northern Territory were the only regions in which property values began to grow. Regional Tasmania was the only region in the country where housing values continue to enter record highs.
The reduced rate of decline has also been apparent in higher auction clearance rates during May, according to recent news. During the last week of May, Sydney clearance rates broke over the 60% mark. This is the first time that Sydney has reached these levels in a year. Additionally, Melbourne rates have remained over the 60% mark for more than 6 weeks.
Lawless acknowledged that the clearance rates do remain low compared to what they were a few years ago; they are better than they have been. The improved performance in housing auction aligns well with the reduced rate of decline for the property market.
Reductions in Dwelling Values
Since the housing market reached a peak in October 2017, national values overall have reduced by a total of 8.2%. Currently, values across the combined capital index are down by 10.1%, while regional values have remained relatively resilient, only falling by approximately 3% since the peak. Some of the larger capital city drops in value have been recorded in locations like regional WA, Perth, and Darwin. Perth, for instance, saw a decline of 19.2%, while Darwin saw huge losses of 29.5%.
Issues with housing values have been particularly significant in regions of the country where mining downturn has prompted a persistently weak economic and demographic environment. The regions mentioned above currently offer some of the most affordable housing environments in the country to would-be homeowners. This would explain why there's such a significant proportion of first-time buyers appearing in these areas.
The last time that Darwin saw home values this law was in the March of 2017, and Perth Values haven't been this low since April 2006. For the Regional WA, these are the lowest prices that we've seen since July 2005.