Capital city dwelling values increasing at fastest annual rate since May 2010 while Sydney values rise at fastest annual pace since November 2002.

Capital city dwelling values moved 1.4% higher over the month, taking the combined capital city index to an annual growth rate of 12.9%; the highest annual rate of growth since the twelve months ending May 2010. Four of Australia’s eight capital cities are now showing an annual growth rate in dwelling values higher than 10%, while Perth and Darwin values continue to trend lower on an annual basis.

According to CoreLogic head of research Tim Lawless, the March
results highlight the continued resurgence in the pace of capital
gains “fueled largely by lower mortgage rates and a rebound in investment activity”.

The diversity of performance between houses and units is also a current key feature of the housing market. Across the combined capitals index, house values were 13.4% higher over the past twelve months compared with a 9.8% rise in unit values.

With the number of properties being advertised for sale remaining low, Mr Lawless said this is creating a heightened sense of urgency in some markets. Nationally, the number of residential properties advertised for sale was 6.9% lower than a year ago in March, and total listing numbers were 4.0% lower across the capital cities.

Rental conditions have shown a subtle improvement across
most cities but yields slip to new record lows in Sydney and

According to Mr Lawless the coming months will provide an indication about how investors and lenders respond to new APRA polices released to the market on March 31. He said, “The additional APRA supervisory measures to reinforce sound residential mortgage lending practices in ‘an environment of heightened risks’ focus on dampening investment demand, but not quelling enthusiasm from this segment completely.”

Source: CoreLogic