Aussie Capital City Property Values Peaking

A look at value growth of real estate in Australia’s capital cities shows that increases are slowing. The RP Data-Rismark International Home Value Index indicates more moderation in …

A look at value growth of real estate in Australia’s capital cities shows that increases are slowing. The RP Data-Rismark International Home Value Index indicates more moderation in capital city markets and that peak growth levels have been passed. That doesn’t equate to zero growth, however. Experts expect value to continue increasing in all capital cities such as Darwin, Adelaide, Melbourne, and Canberra, although Sydney and Perth are the only cities in which home values are higher than they were at the last peak. For more on this continue reading the following article from Property Wire.

Residential property values across Australia’s capital cities increased by 0.1% in November, much lower than the increases of 1.6% for September and 1.3% for October, according to data from the latest index to be published.

The RP Data-Rismark International Home Value Index shows moderate value growth across the combined capital cities over the month but the combined capital city home values are 8% higher over the last 12 months, and 8.3% higher for 2013 so far.

The combined capital city index has now recorded its fastest rate of annual growth since October 2010 and RP Data’s senior research analyst Cameron Kusher said that the slowing rate of capital city home value growth indicates a potential moderation in overall growth.
Sydney and Melbourne recorded have recorded relatively strong levels of annual value growth and are up 12.5% and 6.6% respectively over the last 12 months. However, over the past couple of months, the monthly rate of growth in both cities has begun to slow.

Kusher pointed out that while further growth is likely for this cycle, it may be the case that the peak rate of value growth in both cities has now passed.

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Over the three months to November 2013, home values increased across each capital city except for Hobart where there was a fall of 4.7% and Canberra with a decline of 3.5%.

Kusher said that rising home values are becoming more broad based rather than just being focussed across a handful of capital city markets.


Values increased by 5.8% in Sydney, by 1.5% in Melbourne, by 1.1% in Brisbane, by 2.6% in Adelaide, by 2.5% in Perth and by 1.8% in Darwin.

‘Although we are seeing home values generally trending higher across the capital cities, Sydney and Perth are still the only individual capital city markets in which home values are now higher than they were at their previous peak. The increase in home values seems to be slowing to a level reflective of more sustainability when compared to the growth in other indicators,’ explained Kusher.

He also pointed out that the latest data from the Reserve Bank shows private sector housing credit increased by 5% over the 12 months to October 2013, its highest annual rate of growth since June 2012. The data also indicates that housing credit for investment housing at 6.4% per annum is expanding at a much faster pace than owner occupier finance at 4.3% per annum.

The data also shows that t typical capital city home is currently taking 41 days to sell compared to 50 days a year ago and homes are being discounted by 5.8% currently compared to 6.6% a year ago.

This article was republished with permission from Property Wire.


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