Sydney leads house price rally
Sydney has seen a property rebound that led a rally for house prices in May.
The CoreLogic May Hedonic Home Value Index has shown a 1.6% rise in capital city dwelling values for the month, leading home values 5% higher for the calendar year to date. The figures were driven by a surge of 3.1% for Sydney home values.
The result brought the annual rate of growth across Australia’s capitals to 10%. Sydney and Melbourne led the way in year-on-year growth, up 13.1% and 13.9%, respectively. Values climbed year-on-year across all capital cities except Perth and Darwin. Perth saw a 4.2% decline, while Darwin fell 3.5%.
“Lower mortgage rates are likely to have a positive effect on consumer confidence and housing market conditions, with the standard variable mortgage rate now at its lowest level since 1968,” CoreLogic head of research Tim Lawless said.
Lawless said the research group has also noted an increase in volume across its valuation platforms, suggesting an increase in mortgage activity. The extent to which this activity is stemming from investors, though, is unclear, Lawless said. He did say, however, that March data showed investors now comprise 47.6% of all new mortgage commitments, the highest proportion since August last year.
“Anecdotal evidence suggests investor numbers may have increased further from this time, with some lenders reversing the tighter lending requirements that were previously in place for investment purposes as growth in investor related credit tracks well under the APRA speed limit of 10% per annum,” Lawless said.