A rebound in the pace of capital gains across the Australian housing market throughout February saw the national index rise by 1.1% over the month, with the strongest capital gains continuing to emanate from Sydney (+1.7%) and Melbourne (+1.2%). The the remaining capital cities recorded a more modest rise, with Darwin the exception where home values were down 1.4% over the month.
On an annual basis, both Sydney and Melbourne moved back into double-digit annual growth rates, with values up 10.9% and 10.7% respectively over the twelve months ending February.
The latest results continue the recovery trend that has been running since June last year, following a peak-to-trough decline of 8.4% in the national index, with larger falls in Sydney (-14.9%) and Melbourne (-11.1%).
Melbourne was the most recent city to stage a nominal recovery with housing values surpassing the September 2017 peak last month. Melbourne has joined with Brisbane, Canberra, Hobart and Adelaide where housing values are also tracking at record highs.
Despite posting the most rapid recovery trend amongst the capitals, Sydney housing values remain 3.7% below the 2017 peak. Based on the rate of growth over the past three months, Sydney housing values could stage a nominal recovery by the end of May this year.
There was further evidence that the long-running downturn is over for the Perth housing market, with dwelling values increasing by 0.3% in February. This marks four consecutive months where dwelling values have avoided a fall – a trend not seen since the market peaked in mid-2014. Tim Lawless said, “Although Perth values are now trending higher, the recovery period is likely to be a long one, with Perth housing values remaining 21.0% below their peak.”
Regional markets are generally lagging behind the capital cities, with housing values only 1.4% higher over the past twelve months compared with a 7.3% rise across the combined capital city markets. Meanwhile, the regional centres adjacent to the largest capitals, as well as coastal lifestyle markets, show a stronger performance.