Home values stall
Home value growth has recorded its slowest month-on-month growth since December 2015.
CoreLogic’s April Hedonic Home Value Index has shown dwelling values growing at a slow pace after recording dramatic capital gains over the past several months. Capital city home values grew just 0.1% in April.
Sydney’s hot housing market flatlined in April, with 0.0% growth for the month. Melbourne also stagnated at just 0.5%. Perth and Canberra saw declines for the month, with Perth falling 1.0% and Canberra values declining 2.8%.
The softer result follows a strong run of capital gains from the second half of 2016 through the first three months of 2017. Sydney values were up 11.3% from July 2016 to March 2017, while Melbourne values were up 12.6% over the same period.
According to CoreLogic, the April result was the weakest monthly change in Sydney dwelling values since December 2015 when values fell 1.2%.
CoreLogic research head Tim Lawless said the weaker month may not be cause for alarm.
“The trends remain generally positive, with quarterly growth of 2.9% across the combined capitals index,” he said.
Lawless urged caution in interpreting the results as the peak of the market.
“The softer results should also be viewed against a backdrop of an ever-evolving regulatory landscape which is firmly aimed at slowing investment and interest-only mortgage lending. Testament to this is mortgage rates which have been edging higher, particularly for investors and interest-only loans, as well as rental yields which have been hovering around record lows. The higher cost of debt, as well as stricter lending and servicing criteria, has likely dented investment demand over recent months,” he said.