CoreLogic’s Cameron Kusher has penned an interesting piece looking at real inflation-adjusted dwelling price growth since December 2008, which reveals that exactly half of the nation’s housing markets have experienced falling values over the past eight years:
What is most stunning about the above chart is the extent to which real dwelling value growth nationally (+36.9%) has been driven by the two major markets of Sydney (+67.8%) and Melbourne (+55.5%). Aside from these markets, only Canberra (+11.7%) and Darwin (+2.6%) have experienced any growth, whereas real values in Brisbane (-2.3%), Adelaide (-2.6%), Perth (-9.0%), and Hobart (-8.6%) have all gone backwards.
Kusher has also created the below chart tracking real home value changes since their previous market peaks, which again shows Sydney and Melbourne streets ahead and also the only two capital city markets where values are above their prior peaks:
According to Kusher:
In Sydney, values are 37.8% higher than their March 2004 previous peak. Real Melbourne home values are 19.4% higher than their September 2010 peak. In Brisbane, real home values peaked over the March 2008 quarter and at the end of 2016 they were still 9.1% lower than they were at that time. Adelaide home values were 5.3% lower in December 2016 than they were at the time of their real value peak in June 2010. Perth home values peaked in real terms all the way back in September 2007 and at the end of 2016 they were still -18.5% lower in real terms. Real dwelling values peaked in December 2007 in Hobart and at the end of 2016 were still -14.3% lower. Following their peak over the September 2010 quarter, Darwin dwelling values are currently -19.8% lower in real terms. Finally in Canberra, real dwelling values are -1.4% lower than their June 2010 peak…
With inflation remaining low and values continue to rise we would anticipate that in real terms values are likely to continue to rise across most of the capital cities throughout 2017.
It’s quite astonishing how bifurcated Australia’s housing market has become. It’s really all about Sydney and Melbourne.
