Strong month for house prices, but slowdown evident
House prices are losing steam despite a strong gain in July, new research has revealed.
The CoreLogic Home Value Index for July has shown a 1.5% rise in capital city home values for the month. Melbourne led the way with a 3.1% gain, followed by Canberra at 2.4%.
“The recent bounce in capital gains may be partially due to a recovery from the seasonal slump on values recorded in April and May. However, other factors such as stamp duty concessions for first home buyers in New South Wales and Victoria may also be having a positive effect on demand,” CoreLogic research head Tim Lawless said.
While Lawless said it was too early to measure the impact of first home buyer incentives, he said first time buyers had historically been responsive to stimulus measures.
In spite of the strong gain or the month, Lawless said the pace of capital gains had slowed from 3.6% in February to 2.2% at the end of July. This slowdown was most evident in hot markets like Sydney and Melbourne, CoreLogic said. However, Melbourne’s market showed more resilience, with auction clearance rates consistently in the mid-70% range, while Sydney’s clearance rate has dipped below 70% for seven of the last eight weeks.
“Melbourne appears to be benefiting from consistently high population growth which is creating strong demand for housing, as well as consistently high jobs growth and more affordable housing options relative to Sydney,” Lawless said.
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