States of the nation. What’s happening in yours?
In the 2016-2017 financial year, Sydney continued its run as Australian property market’s golden child. According to data from CoreLogic, with 18.9% annual value growth to March 2017, Sydney continues to outperform all state capitals, followed closely by Melbourne with 15.9% growth, Canberra 12.8% and Hobart at 10.2% rounding out the only four capitals with double digit growth in the same period.
Values have increased more modestly in Brisbane (3.7%) and Adelaide (3.5%) while they have fallen in Darwin (-4.4) and Perth (-4.7%).
The change in values is driven by a number of factors including demand, the continued low cost of borrowing, population growth, jobs growth and economic trends.
Not surprisingly, Sydney and Melbourne lead the way in demographic and economic factors that are continuing to drive demand. In 2016-2017 Sydney attracted some 1,100 new arrivals every week. It’s interesting to note that 57% of Australia’s population live in NSW and Victoria, with 54% of the country’s economic activity accounted for by these two states.
Look to the post-boom mining states where home values are falling, and it’s easy to see the impact that challenging employment availability and broader economic trends are having on housing demand and values.
The new construction boom
As property values have generally increased and demand is still high, the level of housing construction has risen, particularly in eastern states. The surge in unit construction is not only changing the property landscape, it has already led to units increasing in value at a slower pace than houses across a number of capital cities and a concern of over-supply in some capitals.
In January 2016, CoreLogic head of research Tim Lawless said, “Capital city growth rates have also shown a growing divergence between the broad housing product types. The divergence in growth rates is the most distinct in Melbourne and Brisbane, where concerns around unit oversupply have eroded buyer confidence.”
If you’re in the market for an apartment, 2017-2018 could be the year to take advantage of easing prices and make your move.
