Australian housing market update – March 2016

The first two months of the year have seen the housing market regain some of the losses recorded over the final quarter of 2015, with capital city dwelling values rising by half a percent in February following a 0.9% rise in January to take our hedonic index 1.4% higher over the year to date.

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NAB, in conjunction with CoreLogic (RP Data), brings you the Australian Housing Market Update for March 2016.

Take a look at the national update or your capital city update by clicking on the relevant link below:

The first two months of the year have seen the housing market regain some of the losses recorded over the final quarter of 2015, with capital city dwelling values rising by half a percent in February following a 0.9% rise in January to take our hedonic index 1.4% higher over the year to date.

The latest figures take the rolling quarterly change in capital city dwelling values to an increase of 1.4% and the annual change up slightly from the 7.4% last month to 7.6%.  The combination of capital gains and the addition of newly built housing has taken our estimate of the total value of Australia’s residential housing stock to $6.5 trillion.

Across the individual capital cities, Sydney was the only city where home values were lower over the quarter, down -0.2%.  The largest movements in our capital city index over the past three months were in Hobart which was up 8.5%, Melbourne values were up 3.8%, Brisbane showed a 2.0% rise and Canberra dwelling values were 1.5% higher since December.

Overall, the broad trends in the housing market mask a great deal of diversity from city to city and region to region.  Perth and Darwin remain the only capital cities to record a fall over the past twelve months, however the rate of capital gain in Sydney has slowed substantially since July last year.

The cumulative effect of tighter lending conditions, more expensive mortgage rates for investors and lower yields, as well as natural affordability constraints and higher levels of new housing supply, is likely to continue to impact the Sydney housing market resulting in a further slowdown over the year.  It is also expected that as the year progresses the rate of home value growth in Melbourne will also slow however, the slowdown is likely to be more moderate than the slowing in Sydney, at least during 2016.

Recent housing market forecasts released by CoreLogic together with Moody’s analytics indicate a continued slowdown in these markets over the remainder of the year.

Based on these forecasts, which will be updated monthly, Melbourne’s housing market is expected to be the best performing city for capital gains over 2016 before the pace of capital gain falls away to less than 1.5% over 2017. The markets that are forecast to show an improvement in the rate of capital gains are Brisbane, Canberra and Hobart.

Outside of the capital cities we are continuing to see a healthy rebound in housing market conditions across the lifestyle markets.  Following a slump in buyer activity and prices between 2008 and 2014, it seems that demand for lifestyle properties and holiday homes is consistently improving which is pushing prices higher in these regions.

On the other hand, regional markets linked to the mining and resources sector continue to record weak conditions.  There may be some tentative signs that these markets are reaching a floor in values and activity, however there is no indication that values will start to rise in these areas over the foreseeable future.

The information in this video has been prepared by RPData Pty Ltd ABN 67087 759 171 trading as CoreLogic Asia Pacific (‘CoreLogic RPData’). CoreLogic RP Data is not related to NAB. The information in the video is provided for general information purposes only and is a summary based on selective information which may not be complete for your particular purposes. NAB does not accept liability for any loss or damage whatsoever which may   directly or indirectly result from any advice, opinion, information, representation or omissions, whether negligent or otherwise, contained in the video.  

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