Nationally, home values declined by -0.5% in the first quarter of 2018; the fourth consecutive month in which values were lower over a three month period. However, when looking at our capital cities versus our regional markets, there are some surprising differences.

Regional markets outperform capital cities

Combined capital city home values fell by -0.9% January to March. In contrast, the combined regional markets recorded a value increase of 1.1% over the quarter which was the biggest increase in regional values over a three month period since May 2017.

Here’s a closer look at what’s happening around the country.

Tasmania

Hobart was the only capital city to record an increase in values over the quarter (+3.4%). It is overwhelmingly the strongest market for value growth currently; a position it’s expected to hold over the coming months. Low stock levels and strong demand continue to fuel growth in the market. Values are also rising in regional Tasmania (+2.5%) with these increases also expected to continue over the coming months.

Queensland

Values in Brisbane were unchanged in the first quarter of 2018, however looking at each month, values did increase moderately in March 2018 after two months of declines. Over recent years Brisbane’s housing market has been characterised by moderate value growth which is expected to continue over the coming months.

Values are also rising at a fairly slow pace in regional Queensland, up +1.1% in the first quarter. This trend is expected to continue, with the strongest growth occurring in the south-east regions of the state.

New South Wales

Property values in Sydney have been declining since the middle of 2017 and at the end of March 2018 were -3.9% lower than their peak. For the first quarter of 2018 Sydney values were down -1.7%. Tighter lending policies and stretched housing affordability have been key drivers of the slowdown, as has the rising volume of stock listed for sale. The rate of decline has slowed in Sydney however it is likely that declines will continue at this slower pace.

Outside of Sydney, regional markets are recording a more rapid rate of value growth, up +0.9% for the first quarter, however these regions are also experiencing a slowdown in growth. Values in regional New South Wales are expected to continue to climb however, the pace of growth is anticipated to slow over the coming months.

Victoria

Melbourne home values have fallen over each of the past four months and they are now -0.7% lower than their peak. For the first quarter of 2018, Melbourne values were down -0.5%. Compared to Sydney, value declines remain moderate in Melbourne which is likely due to stretched yet relatively more affordable housing and ongoing strong migration. Over the coming months it is anticipated that values will continue to decline moderately.

Values are rising in regional Victoria, up +1.6% for the first quarter, and the rate of growth has remained fairly steady, a trend which we expect to continue over the coming months.

South Australia

Adelaide home value growth has slowed with falls recorded over some recent months. Adelaide values are now -0.4% lower than they were at their peak and also -0.4% lower this quarter. Overall we expect values to remain steady or trend slightly higher over the coming months. Values in regional South Australia were up +0.6% for the quarter, however they have trended lower over recent months – one of only two regional areas nationally to experience value falls in March 2018. However, we expect that regional home values are likely to be very little changed over the coming months.

Western Australia

Recently it has looked as if the declines in the Perth market are coming to an end, with values down just -0.2% for the quarter. Over recent months we have been seeing moderate falls offset by slight increases in home values and sales activity is beginning to pick up. Despite the recent steady performance, values remain -10.8% lower than they were at their peak. Over the coming months Perth home values are expected to hold reasonably firm with modest month to month falls being offset by modest rises. In regional Western Australia values rose over March but were lower over the quarter. It is expected that values will trend moderately lower over the coming months.

Northern Territory

Darwin values rose in March but they were lower over the quarter, down -0.1%. We are expecting weaker housing market conditions to persist over the coming months. While Darwin values are lower, regional Northern Territory values are slightly higher for the quarter, up +1.5%. It is expected that conditions will be relatively flat over the coming months in regional Northern Territory.

Australian Capital Territory

Values rose in Canberra over the month but they were lower over the quarter, down -0.2%. The annual rate of value growth is slowing for the city and it expected that values could rise at a slow rate over the coming months.

If you’re interested to know what your home is worth, organise a free appointment for a home loan health check and to receive a free CoreLogic property report on your home.