Capital city home prices weaken: CoreLogic

Growth in city home prices has slowed but still tops 9pc in Sydney and Melbourne, and outpaces regional areas.

Auctioneer Craig Marshall conducts bidding at a Sydney property sale. Pic: Getty Images

Australia’s capital city property prices are outpacing regional areas, despite showing some signs of softness as new research shows that home values rose by 1.1 per cent across the country.

The CoreLogic Hedonic Home Value Index recorded a solid rise across the combined capital cities over August, while the performance of the combined regional areas, based on a one month lag, remained comparatively soft, with dwelling values virtually flat at over the month.

CoreLogic head of research Tim Lawless said that capital city prices had started to weaken but still remained ahead of regional areas.

“Despite a strong month-on-month reading, the pace of annual capital gains has trended lower compared with the 2015 peak in growth conditions, when capital city dwelling values were rising at 11.1 per cent per annum,” he said.

CoreLogic said the most recent 12-month period has seen dwelling values rise by a lower 7 per cent per annum.

The rate of annual growth in Sydney has virtually halved from a recent 18.4 per cent peak to the current annual rate of 9.4 per cent.

“In Melbourne the annual growth trend peaked at 14.2 per cent per annum last year and has since tracked back to 9.2 per cent per annum over the most recent 12-month period,” Mr Lawless said.

Perth and Darwin remain as only capital cities to record a fall in dwelling values over the most recent 12-month period, declining by 4.2 per cent in both cases.

“Softer economic conditions and a significant fall in overseas migration rates, together with an increasing net outflow of residents to other states and territories, has made a substantial dent in

housing demand,” Mr Lawless said.

“This has resulted in corresponding declines in both dwelling values and rental rates.”