In inflation adjusted terms, dwelling values are now lower in most capital cities, with the exception of Hobart, according to the latest Property Pulse report from CoreLogic, which analysed the March quarter consumer price index (CPI) data.
CPI, which measures inflation, increased by 0.4% over the March quarter and was now 1.9% higher year-on-year. “With the release of this data, it is also possible to look at inflation-adjusted or real changes in dwelling values across the capital cities. When looking at these figures, the inflation adjustment means that value growth is lower,” CoreLogic said.
National dwelling values fell by 1% and were 0.7% lower over the past 12 months. Hobart was the only capital where real values increased over the quarter (+3%), with Sydney recording the biggest quarterly decline (-2.2%).
Over the past 12 months, only Melbourne (+3.4%), Hobart (+10.9%), and Canberra (+1%) have seen their dwelling values outpace inflation. The largest decline over the year was recorded in Darwin (-9.3%), followed by Perth (-4.3%) and Sydney (-4%).
“Over the past decade, only Sydney (+43.3%) Melbourne (+38.7%) and Hobart (+6.4%) have recorded ‘real’ growth in dwelling values,” CoreLogic said.
“These latest figures really highlight just how narrow value growth has been in the national housing market over the past decade,” said Cameron Kusher, head of research at CoreLogic. “It also highlights that low mortgage rates alone have not been the key driver of value growth - mortgage rates are the same in Sydney as they are in Perth yet the former has recorded real growth of 43.3% while the latter has seen values fall by -25.0%.”
With dwelling values dropping over recent months, all capitals, with the exception of Hobart, now have real values which sit below their previous peaks.
