House prices in Australia are still rising 'briskly', except in Melbourne

Photo by Robert Cianflone/Getty Images

Australian capital city house price growth slowed in November, according to new figures released by CoreLogic on Thursday.

The group’s Hedonic Home Value Index rose by 0.2% for the month, the weakest increase recorded since December last year.

But it was only driven by price declines in Melbourne, particularly for apartments.

“The soft performance across the combined capital city reading was attributable to a 1.5% fall in the Melbourne index,” said Tim Lawless, CoreLogic head of research. “Delving into the Melbourne results in more detail showed that unit values were down a larger 3.2% in November, while Melbourne house values declined by 1.3% over the month.”

That performance was not replicated by other capital city markets which, with the exception of Canberra where prices were flat, all saw prices lift, in some cases at a rapid pace.

Of note, those in Sydney, Hobart, Adelaide and Darwin all logged monthly gains of 0.8% or higher.

Certainly a “brisk” pace, to borrow a word recently used by the Reserve Bank of Australia, leaving the median capital city house price up 9.3% over the past year.

Source: CoreLogic

The main factor behind the hefty annual increase, says Lawless, is continued strength in the Sydney and Melbourne housing markets.

The highest annual growth rate is evident in Sydney and Melbourne where dwelling values are now 13.1% and 11.3% higher respectively, reflecting a steeper upwards trajectory in growth over the second half of the year,” he says.

“The Hobart and Canberra markets have also seen some acceleration in growth rate trends with dwelling values up 8.5%, and 8.4% respectively over the past twelve months.”

The index is a weighted average of prices, so highly influenced by developments in the larger housing markets.

Every state capital aside from Perth has now seen prices increase over the past year, with those in Darwin returning to positive territory for the first time since February 2015.

Nationally, house prices have now risen in year-on-year terms for 4.5 years, leaving the gain over the cycle at 42.2%.

Those in Sydney and Melbourne have risen by 67.3% and 46.3% over this period, dragging the national figure higher.

From the height of the global financial crisis in January 2009, prices in Australia’s most populous and most expensive cities have now gains 95.7% and 78.0% respectively.

Source: CoreLogic

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