Cities finally outperforming regional areas again

For the first time in more than a year house prices in cities outperformed regional areas in much of Australia.

Dwelling values increased 2.8 per cent in March, the fastest appreciation rate since 1988, according to Corelogic’s national home value index. The capital cities combined recorded a 2.8 per cent lift in March compared to a 2.5 per cent gain in the combined regionals index.

Sydney led in regards to capital gains, up 3.7 per cent during the month and 6.7 per cent higher in the quarter. Melbourne was the only city not to keep pace with regional growth, up 2.4 per cent compared to the regions’ 2.6 per cent. Brisbane was behind the two largest cities, rising 2.4 per cent for the month and 4.8 per cent for the quarter.

House prices rise at fastest pace in 32 years

LocationMonthQuarterYearMedian Value
Source: CoreLogic national home value index

Corelogic research director Tim Lawless said the latest results showed a change in the market.

“Housing values in regional areas are 11.4 per cent higher over the past year, demonstrating the earlier stronger growth trend; capital city values are now 4.8 per cent higher on an annual basis with the acceleration in growth evident in March,” he said.

Lawless said it also showed a remarkable recovery for Melbourne and Sydney which had staged a recovery from earlier downturns.

“Sydney dwelling values are now 2.6 per cent higher than their July 2017 peak, a remarkable recovery considering the -14.9 per cent drop in values through to May 2019 and the further -2.9 per cent fall throughout the Covid-19 downturn,” Lawless said.

“Similarly, Melbourne housing values have recovered from the -11.1 per cent fall between 2017 and 2019, and the -5.6 per cent drop in values through the worst of the Covid related downturn to set a new record high in March.”

The high-density market turned a corner in March but was still outpaced by lower density properties.

Unit prices start to rise

LocationUnit monthly changeUnit annual, median priceHouse monthly changeHouse annual, median price
Sydney2.1%0.2% $755,3604.3%7.7% $1,112,671
Melbourne1.7%0.9% $539,1212.6%0.4% $859,097
Brisbane1.0%1.9% $400,8662.6%7.9% $607,969
Adelaide0.6%5.1% $350,2441.6%9.1% $518,692
Perth1.7%4.0% $385,2651.8%6.3% $527,833
Hobart4.9%11.2% $453,7263.0%12.8% $584,974
Darwin3.4%9.8% $302,8201.9%16.3% $519,575
Canberra0.7%5.8% $485,8873.3%13.9% $819,707
Combined Capitals1.9%1.1% $592,1543.1%6.0% $747,639
Home values by type. Source: Corelogic national home value index

Across the combined capitals, the quarterly growth rate for houses at 6.5 per cent more than double that of unit prices, which rose 3.1 per cent.

“Despite the underperformance, unit markets have turned a corner, with Sydney recording two consecutive months of rising values,” Lawless said.

“While the Melbourne unit market has seen values consistently rising since October last year, the trend has accelerated in recent months,” Lawless said.

Written: 8 April 2021

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