Property growth still driven by Sydney and Melbourne
Property demand in New South Wales and Victoria accounts for a historically high proportion of national demand.
New analysis from CoreLogic shows New South Wales and Victoria are driving demand nationwide, with the two states now making up a historic proportion of dwelling value growth and mortgage lending.
“The current housing market growth phase has really been all about Sydney and Melbourne. When you look at dwelling value growth, increases have been substantially higher in Sydney and Melbourne than in all other capital cities. At the same time, demand for mortgages has surged across NSW and Victoria, both of which are proxies for Sydney and Melbourne, while it has barely increased across the remaining states and territories,” CoreLogic researcher Cameron Kusher said.
The value of mortgage lending in New South Wales in December 2016 was recorded at $14.5 billion, whereas mortgage finance in Victoria was valued at $9.6 billion. Over the month, Kusher said the two states accounted for a combined 69.5% of all housing finance commitments.
“The data shows just how concentrated mortgage demand nationally is currently in NSW and Vic. With the demand focused so much on those two states, it’s no wonder values in Sydney and Melbourne have increased so much more than in the other capital cities. While steps have been made to cool mortgage demand, particularly from investors in Sydney and Melbourne, the data points to the fact that demand remains unquestionably strong,” Kusher said.
Kusher argued that further changes could be required to cool mortgage demand and keep a lid on rising house prices.