Capital city dwelling values have recorded their first annual decline since November 2012 while regional values are continuing to edge higher, according to CoreLogic’s Hedonic Home Value Index for April.
Dwelling values were 0.1 per cent lower across the country in April. This was the seventh consecutive month-on-month fall since values started waning in October 2017.
Similar to previous months, declines were concentrated mostly within Australia’s largest capital cities. Combined capital city dwelling values were 0.3% lower over the month, driven by falls of -0.4% in Sydney and Melbourne and a smaller decline in Brisbane (-0.1%).
These falls were offset by flat conditions in Perth and small rises in Adelaide (up 0.1%), Darwin and Canberra (both up 0.6%). Hobart was the only capital city to see an increase above 1 per cent in April.
While capital city values didn’t fare so well in April, combined regional dwelling values increased by 0.4 per cent.
According to CoreLogic head of research, Tim Lawless, this is a reversal of longer term trends.
“At a macro level, the latest trends are virtually the opposite of what we have become used to over the past five or so years. Regional areas are now outperforming the capitals and units are outperforming houses. Also the most expensive properties are now showing weaker conditions than the more affordable ones.”
Regionals seeing more gains
CoreLogic’s data for April has confirmed the shifting state of the property market, whereby regional areas are now outpacing the capital cities.
As stated in the April report, “The past five years has seen combined capital city dwelling values appreciate at the annual rate of 6.8% which is almost double the annual rate across the combined regional markets at 3.5%. The past twelve months has seen capital city dwelling values fall by 0.3% while regional values are 2.4% higher.”
What regional areas are seeing growth?
The Central West region has seen an annual change in dwelling value of 7.3%, making it one of the top 10 regional performers in the country.
It was outpaced only by Geelong with a 9.8% rise, followed by the Southern Highlands and Shoalhaven region in NSW (up 9.2 per cent) and South East Tasmania (up 7.4%).
Launceston and North East Tasmania, Newcastle and Lake Macquarie, Capital Region, Coffs Harbour-Grafton, Ballarat and Hunter Valley (exc. Newcastle) round out the top 10.
Will this trend continue?
After regional areas have recorded soft gains over the past 13 years, the combined markets are now outpacing the capitals. This is a trend that has been occurring since September last year.
Mr Lawless stated that the outperformance across regional markets is mostly attributable to stronger conditions across the larger regional centres located within close proximity to the three major capitals, as well as improving conditions across many of the lifestyle markets.
Click here to view the full report.