Australian property prices lifted for the fifth month in a row during July, according to CoreLogic’s latest national Home Value Index (HVI), with an increase of 0.7 per cent.
Since bottoming in February, property prices around the country have now lifted by 4.1 per cent, but still remain 5.3 per cent below the peak that was reached in April last year.
Additionally, the rate of growth was seen to have eased in July, following a 1.2 per cent gain in May and a 1.1 per cent increase in June. CoreLogic research director Tim Lawless pointed out that Sydney had experienced the most substantial reduction in growth.
“After leading the upswing, the monthly pace of growth in Sydney housing values has halved from a recent high of 1.8 per cent in May to 0.9 per cent in July,” he explained.
“Sydney has also seen a significant rise in the number of fresh listings added to the market, 9.9 per cent higher than the same time last year and 18.0 per cent above the previous five-year average. An increased flow of new listings provides more choice and may be working to reduce some of the urgency felt among prospective buyers.”
In contrast, the pace of growth accelerated to 1.4 per cent in both Brisbane and Adelaide during July. Both cities experienced a rise in new listings, but Mr Lawless noted that they remained below the levels seen a year ago as well as the five-year average.
Property prices in Melbourne and Darwin recorded an increase of 0.3 per cent over the month, while prices in Hobart were unchanged. Canberra was the only capital city to record a decline in values, suffering a dip of 0.1 per cent.
CoreLogic indicated that lower gains across the upper quartile of the market was the primary reason that the rate of growth had lost momentum recently, while performance across the middle and lower quartile of the market has remained more consistent.
“Some resilience in growth across the middle and more affordable end of the market aligns with housing finance data which has shown a stronger bounce back in the value of lending to first home buyers and investors over recent months,” said Mr Lawless.
“These segments tend to be more active across the middle to lower end of the pricing range where competition to purchase a home may be more intense.
“Premium housing markets tend to lead the cycles, so the slowdown in the pace of growth could be a sign of a broader easing in the pace of growth over the coming months.”
Prices increased by 0.8 per cent across the combined capitals, compared to only 0.2 per cent for the combined regions. CoreLogic noted that every rest-of-state region experienced a smaller change in prices in July versus their respective capital city.
The latest data comes after AMP chief economist Shane Oliver last month expressed concerns over a potential reversal in the property price rebound.
Dr Oliver noted that rising mortgage rates, anticipated unemployment growth over the coming year, and the chance of a recession, were all potential risks to the property market.
