Whilst Sydney home prices continued their downward slide in October, two other east coast capital cities have delivered strong results
Over the past month, Hobart has recorded a 0.9 per cent upswing in property prices whilst Melbourne was standing in good stead delivering a 0.5 per cent increase.
In comparison Sydney’s median dwelling value dropped 0.5 per cent in October.
Over the rolling quarter, Melbourne’s housing market conditions have remained much stronger compared to Sydney delivering an overall increase of 1.9 per cent over the past three months.
CoreLogic head of research Tim Lawless says the strong Melbourne result was partially due to Victoria’s record breaking migration rate. This is currently creating unprecedented housing demand. In addition, the strong growth in the employment sector and more affordable housing compared to Sydney are also contributing to growth in housing value.
Recently Melbourne was named the most liveable city in the world by The Economist magazine and consistently rates in polls as one of the most desirable places to reside.
It has all the infrastructure that you’d expect from a big city, a healthy job sector and a lower cost of living compared to Sydney. With so many people currently being priced out of the Sydney market, it’s expected that Melbourne will be the place that many turn to for their housing needs.
According to Domain group data, the Melbourne inner ring suburbs of Middle Park, Parkville, Toorak, South Melbourne, Armadale and Windsor have all doubled in price since March 2012.
However, suburbs in Melbourne’s outer west, outer north and outer southeast such as Rockbank, Melton South, Millgrove and Melton have also posted strong rental yields over the last few years, making them attractive investment options.
Elsewhere three other capital cities were steady over October with Brisbane prices increasing by 0.2 per cent, and Perth and Adelaide both unchanged at 0.0 per cent. Darwin’s prices decreased by 1.6 per cent and Canberra recorded a drop of 0.1 per cent.
Meanwhile Mr Lawless says tighter credit policies have changed the landscape for borrowers which has affected the overall slowdown in the pace of capital gains.
The peak rate of growth in dwelling values lines up closely with the peak growth rate for investment lending in late 2016. We saw the housing market respond in a similar fashion through 2015, and the first half of 2016 as investors faced tighter credit conditions following the announcement from APRA that lenders couldn’t surpass a 10 per cent speed limit on investment lending.
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