Hobart and Canberra property gaining on Sydney and Melbourne
Hobart and Canberra are becoming the new hot performers in the property market.
Research from CoreLogic shows Hobart and Canberra are seeing high rental yields and accelerating capital growth. CoreLogic research analyst Cameron Kusher said that while Sydney and Melbourne have seen the most dramatic change in home values over the last year, it was important to focus on the total return of property markets.
“By factoring in rental returns, the total returns from residential property are actually positive across all capital cities despite declining values in both Perth and Darwin,” Kusher said.
Kusher said that total returns data showed Sydney and Melbourne leading other capital cities, but that low rental yields in the cities offset capital gains.
“Meanwhile, more moderate but accelerating value growth in Hobart and Canberra along with higher rental returns is resulting in total returns in these two cities closing the gap with Sydney and Melbourne,” he said.
Kusher said total returns showed that property across all of Australia’s capitals had performed more strongly over the past five years than headline value growth would indicate.
“Although Sydney and Melbourne have still recorded the strongest total returns over the past five years, returns in the other capital cities are much stronger once you factor in the rental return performance,” Kusher said,