Property prices in capital cities in Australia increased by 1.8% in June after a fall of 1.1% in the previous month, the latest index data shows.
But overall, growth is easing with quarterly figures showing that prices were up just 0.8%, the slowest quarterly rate of growth since December 2015, according to the CoreLogic home value index.
‘The stronger month on month reading can be partially explained by the seasonality in the monthly growth rates. Adjusting for this effect suggests an easing trend in housing value growth has persisted through the second quarter of 2017,’ said CoreLogic head of research Tim Lawless.
He explained that the trend towards lower capital gains across the combined capitals index is mostly attributable to softer conditions across the Sydney housing market, where quarter on quarter growth was0.8%, down from 5% in the first quarter of the year.
In contrast, the quarterly trend in Melbourne has been more resilient, with growth easing from 4.2% in the first quarter of 2017 to 1.5% in the second quarter of the year.
In Sydney, according to Lawless, the more pronounced slowdown is supported by weaker auction clearance rates which have been tracking in the high 60% range across the city over the last three weeks of June, while in Melbourne, clearance rates have moderated but remained above 70%.
Slower housing market conditions also reflected in the annual pace of capital gains.
Across the combined capitals, the annual pace of capital gains has eased from 12.9% three months ago to 9.6% at the end of June 2017.
Sydney’s annual growth rate has slowed to 12.2% over the 12 months to the end of June 2017, down from a recent high of 18.9% three months ago. Melbourne’s annual growth rate is now the highest of any capital city, surpassing Sydney’s annual rate of growth despite easing from 15.9% three months ago, to 13.7% over the 12 months.
Outside of Sydney and Melbourne, housing market conditions remain diverse. Brisbane now has the third highest quarterly pace of capital gains with values up 0.5% in the second quarter. Brisbane’s growth is entirely attributable to a 0.8% rise in house values which offset a 2.4% fall in unit values over the quarter.
Prices fell lower across the remaining capital cities, except Perth, which posted virtually flat growth of 0.1% in the second quarter of the year.