Domestically property prices have increased in four consecutive months, CoreLogic data shows. In October, residential values rose by 1.2 percent, the highest monthly gain seen since May 2015. Sydney and Melbourne have mainly driven the increase in property prices, while growth has been reported in every capital city other than Perth.
“The stronger rebound in Melbourne and Sydney can be attributed to a blend of factors; tighter labour market conditions and stronger population growth relative to the other capitals, coupled with the stimulatory effect of the lowest mortgage rates since the 1950s, and improved access to credit. Stamp duty exemptions for first home buyers purchasing under specific price points have added additional stimulus to housing demand”, according to CoreLogic research director Tim Lawless
Since their low point in May, Melbourne property values have risen 6.0 percent, while Sydney prices have risen 5.3 percent in the same period. The other major cities, other than Perth and Darwin, have seen varied quarterly growth rates, both of which have seen reductions over the three months to October.
Nevertheless, CoreLogic shows that both cities are slowing down the rate of reduction. The downtrend in home values in Perth and Darwin has persisted, but both markets are showing a turnaround in the downward trend pace.
“Demand for housing is responding to stimulus measures including mortgage, investment property rates that are now lower than anything we have seen since the 1950’s and improved mortgage serviceability tests following APRA’s decision to adjust the minimum interest rate serviceability rules in July this year.”
Mr. Lawless said, “There has been a shortage of new listings for several years which has likely resulted in some pent up demand from homeowners looking to sell. Despite the improved selling environment, new stock additions remain low for this time of the year, which is likely a reflection of ongoing uncertainty and low confidence.”
The increases are extensive and not limited to capital cities. 38 of the 46 capital sub-regions have reported an increase in home prices over the past three months, showing the extent of the current recovery of the housing market.