Residz Team 2 min read
If you thought buying a home was getting more affordable, think again. CoreLogic’s latest Home Value Index shows Australian dwelling values lifted 2.4% in the first quarter of 2022, adding approximately $17,000 to the value of a home.
But it’s a “multi-speed” housing market, according to the property analysis company. The cities of Brisbane, Adelaide, Perth and the ACT, and several regional areas are performing well yet Sydney and Melbourne values have slipped.
“The sharpest slowdown has been in Sydney, where housing prices are the most unaffordable, advertised supply is trending higher and sales activity is down over the year,” noted Tim Lawless, CoreLogic’s research director, in its report.
Meanwhile, the combined regional areas were rising at more than three times the pace of the combined capital cities through the March quarter. Up 5.1% in the three months to March, the regions have been outperforming the combined capital cities (up only 1.5%). As the CoreLogic chart shows, they’ve outperformed the combined capitals on value growth for the past year.
However, regional areas were unlikely to see a repeat of their 2021 growth rates as the affordability advantage and availability of credit had diminished, according to Eliza Owen of CoreLogic, quoted recently in the AFR.
“The regional housing markets are not immune from economic forces,” Ms Owen is quoted as saying in February.“Key drivers for performance in the regions will come down to higher interest rates and affordability constraints, the same headwinds capital city markets are facing.”
Her comments pre-date the Regional Home Guarantee announced in the 2022-23 budget, which gives eligible applicants an opportunity to buy or build a new home in a rural or regional area with a 5% deposit. 10,000 such opportunities will be available to first home buyers, those who have not owned a property in the last five years, and permanent residents.
Image: Modern living room, Victoria, by Tim Collins, Wikipedia