NAB’s Chief Economist, Alan Oster provides his thoughts on the Australian and Global economy.
On a rolling quarterly basis, dwelling values are now trending lower across both the combined capital city regions, where they were 1.6% lower, as well as across the combined regional areas of Australia where values were almost 1% lower.
On a rolling quarterly basis, dwelling values are now trending lower across both the combined capital city regions, where they were 1.6% lower, as well as across the combined regional areas of Australia where values were almost 1% lower. With such broad-based weakness in housing market conditions, it’s clear that tighter credit availability is acting as a drag on housing demand and impacting adversely on the performance of housing values across most areas of the country.
The weakest conditions continue to be felt across Australia’s two largest cities where investment buyers have been the most concentrated, where supply additions have been the highest and where housing affordability is the most stretched.
Sydney values are down 7.4% over the past twelve months and Melbourne values are 4.7% lower over the same period. Values also declined in Perth and Darwin however, the downturn in these two cities has been ongoing since mid-2014, with values falling 3.3% and 2.9% respectively over the past twelve months. Although dwelling values are rising on an annual basis across the remaining cities, the pace of growth has eased relative to a year ago.
The regional housing markets of Australia have also returned a diverse performance, with regional Tasmania standing out as the only broad region nationally where dwelling values are recording double digit growth, up 11.4%. Both Hobart and regional Tasmania continue to record strong housing market conditions, driven by robust housing demand coupled with a shortage of supply.
Regional Victoria is also showing strong growth conditions as demand continues to ripple outwards from Melbourne towards the more affordable cities peripheral to the city’s metropolitan area.
Regional Western Australia continued to show challenging conditions with the annual pace of decline revealing some renewed momentum with values falling by 6.5% over the past twelve months.
Nationally, the highest value quarter of the market has led the downturn, with values falling 6.6% across this segment over the past year while lower quartile values have recorded a 0.5% rise in values. At such a broad geographic level, the weakness in higher value markets is reflective of the weaker conditions across the capital cities, particularly Sydney and Melbourne.
Take a look at the national update or your capital city update by clicking on the relevant link below:
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