03/04/2017 - 10:09

Small growth in sputtering housing market

03/04/2017 - 10:09

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Perth median home values rose 1 per cent in March, according to the latest data from CoreLogic, but the Western Australian capital remains Australia’s worst-performing residential property market on an annual basis.

There are slight signs of improvement but conditions remain sluggish for Perth residential property. Photo: Attila Csaszar

Perth median home values rose 1 per cent in March, according to the latest data from CoreLogic, but the Western Australian capital remains Australia’s worst-performing residential property market on an annual basis.

CoreLogic today said Perth’s median house price at the end of March was $475,000, covering all types of dwellings, from detached houses to units and apartments.

Breaking down the figures, median values for detached houses rose 1.1 per cent, while median unit values were down by 0.7 per cent, CoreLogic said.

The March result was a rebound from a 2.4 per cent fall in median home prices in February, which drove a 1.3 per cent fall for the quarter, CoreLogic said.

And on a year-on-year basis, Perth home values were down 4.7 per cent, to be the weakest performing capital city over that timeframe.

Deteriorating conditions in the resources sector and negative migration trends also hit Darwin median values, which were down 4.4 per cent year-on-year.

The Sydney and Melbourne housing markets are still running hot, with year-on-year growth of 18.9 per cent and 15.9 per cent, respectively.

Annual double digit growth rates were also achieved in Hobart (10.2 per cent) and Canberra (12.8 per cent).

CoreLogic head of research Tim Lawless said the ongoing strength of the housing market in eastern states cities was also apparent across a range of other indicators.

Mr Lawless said settled sales volumes were up 1.3 per cent in March across the combined capital city regions, compared to the same time in 2016.

“Strong buyer demand can be attributed to the rising number of investors participating in the market compared with a year ago, as well as the lower cash rate stimulus and population growth,” Mr Lawless said.

“However, overall transaction numbers remain approximately 15.5 per cent lower than their recent 2013-14 peaks.”

Mr Lawless said it was unclear how long such strong growth conditions can be sustained, particularly following recent policy announcements by the Australian Prudential Regulation Authority aimed at dampening investment-related credit demand.

“We can expect lending conditions for investment purposes will tighten, particularly for investors with small deposits or those applying for an interest-only loan,” he said.

“Additionally, higher mortgage rates handed down by Australia’s major banks may contribute towards cooling some of the exuberance being seen in the largest capital city housing markets.”

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