Regional price growth outpacing state capital cities in Australia latest index shows

Residential property prices in Australia fell by 0.1% in April and are now just 0.2% above the same month in 2017, the seven month in a row of decline, the latest index report reveals.

Falling prices are concentrated in the biggest state capitals with prices in Sydney now down on a monthly, quarterly and annual basis, recording falls of 0.4%, 1.2% and 3.4% respectively to a median value of $875,816.

Melbourne has seen prices fall 0.4% month on month, 0.7% quarter on quarter but values are still 3.7% higher than a year ago with a median price of $720,433 while in Brisbane prices fell 0.1% on a monthly and quarterly basis but were up by 0.9% year on year to $492,911.

The data from CoreLogic suggests that the market in Perth is stabilising. While prices are 2.3% lower than April 2017, they increased by 0.1% quarter on quarter and were flat month on month at $464,238.

The market in Darwin also shows signs of recovery. Prices were down 7.7% year on year but increased by 0.7% quarter on quarter and 0.6% month on month to $433,609, the index also shows.

Hobart is the only state capital to see prices rise substantially, up 1.2% on a monthly basis, up 3.6% quarter on quarter and up 12.7% year on year to $430,138.

Price growth has slowed in both Canberra and Adelaide. In Canberra prices increased by 0.6% month on month, by 0.5% quarter on quarter and are just 2.6% above a year ago while in Adelaide they were up just 0.1% month on month, fell 0.2% on a quarterly basis, taking them to just 0.8% up year on year.

It means that across all capital cities prices are down 0.3% month on month, down 0.7% quarter on quarter and down 0.3% year on year. In the regions the market is more stable, up 0.4% on a monthly basis, up 1.3% quarter on quarter and up 2.4% year on year.

Tim Lawless, head of research at CoreLogic, pointed out that there has been a reversal of longer term property trends. ‘Regional areas are now outperforming the capitals and units are outperforming houses. Also the most expensive properties are now showing weaker conditions than the more affordable ones,’ he explained.

In the last five years combined capital city values appreciated at an annual rate of 6.8%, almost double the annual rate across the combined regional markets at 3.5%. But in the last 12 months capital city values fell by 0.3% while regional values were 2.4% higher.

Similarly, capital city detached house values have recorded an average annual growth rate of 7.3% over the past five years, while unit values were up 5.5% per annum over the same period. ‘Despite the surge in unit construction over recent years, the past 12 months has seen unit values continue to trend higher, up 1.9%, compared with a 1% fall in house values,’ said Lawless.

He also pointed out that more affordable housing stock has been resilient to value falls. Across the most expensive quarter of the market, values have increased at almost twice the pace of the most affordable quarter over the past five years, up 8.2% per annum compared with 4.4% per annum.

He added, that as conditions have slowed down, it’s been the most affordable end of the housing market where values have remained resilient to falls, trending 1.9% higher over the past 12 months while the most expensive quarter of properties has seen values fall by 1.6%.