Growth, inflation and labour market all easing
Although dwelling values fell in May, the pace of decline continued to ease; a trend that has been evident since the beginning of 2019.
In this month’s housing marketing update, CoreLogic report on a variety of outcomes and announcements through the second half of May and early June that are likely to bode well for the housing market, including stability in the federal government, an announcement from APRA that borrower serviceability assessments were likely to improve by late June and the RBA cut interest rates to a new record low on June 3rd.
All this good news wasn’t enough to stave off a further decline in dwelling values in May, however market sentiment does seem to have improved over the second half of the month.
Although dwelling values fell in May, the pace of decline continued to ease; a trend that has been evident since the beginning of 2019. Nationally, dwelling values were down 0.4% in May, which was the smallest month-on-month decline since May 2018.
This improvement is primarily being driven by a slower rate of decline in Sydney and Melbourne where housing values were previously falling at the fastest rate of any capital city. Sydney values were 0.5% lower over the month while Melbourne values were 0.3% lower; the smallest decline in values across both cities since March last year.
In other cities, where housing market conditions have generally been more resilient to a downturn, the trend is opposite. Hobart values have tracked lower for two months running, taking the rolling quarterly rate of change into negative territory for the first time since early 2016, and with Canberra values 0.2% lower over the month, the quarterly rate of growth remains only slightly in positive territory (+0.2%).
The slower rate of decline is also visible in higher auction clearance rates through the month. The last week of May saw Sydney clearance rates break the 60% mark for the first time in a year, while Melbourne clearance rates have held around 60% over three of the past six weeks.
Although clearance rates remain low relative to several years ago when housing market conditions were much stronger, the improved performance at auction aligns with the easing rate of decline.
To find out more, read the June Housing Market Update transcript or take a look at the national update or your capital city update by clicking on the relevant link below:
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