Australia’s capital cities continue to record dwelling value growth, with the latest data from CoreLogic showing property prices are 10.7% higher over the past 12 months to February 2017.
While the overall rate of growth across the combined capital cities remains strong, it is down from previous years. Unsurprisingly, Sydney and Melbourne continue to be the standout performers, with property prices rising by 16.0% and 11.8% across the respective capital cities over the last 12 months. At the other end of the spectrum, Perth has failed to see growth in dwelling values over the last 12 months. That said, the most recent data suggests things are turning around in the capital city, with prices rising 2.1% over the last quarter.
Looking ahead, Perth is expected to enjoy further recovery in dwelling values. While this is promising news, domestic economic pressures would suggest the recovery will be a slow process. Dwelling value growth aside, gross rental yields slipped to a new record low across the combined capitals, with the gross yield on a house now recorded at 3.20%, falling from 3.50% a year ago and 4.12% five years ago. Despite this, investment in the housing market has been consistently increasing, which implies investors are speculating on further capital gains in the housing market.
Source: Tim Lawless, Head of Research, CoreLogic RP Data.