The deflation of Sydney’s housing market ceased this week, with Sydney values rebounding by 0.04% in the week ended 24 May, according to CoreLogic:
Sydney home values have now declined by a cumulative 4.6% over the past 37-weeks, with values also down 4.5% over the past 42 weeks.
By comparison, Melbourne suffered its worst weekly decline in values this cycle, down a hefty 0.21% this week. Melbourne dwelling values have now also declined by 1.4% over the past 25 weeks:
Sydney’s quarterly growth rate remains firmly negative, down 0.86% according to CoreLogic:
However, Melbourne’s quarterly value losses now fallen below Sydney’s at 0.91%:
That said, Sydney’s annual values losses are still well ahead at 4.0% versus Melbourne’s gain of 2.8%:
The immediate outlook remains soft in both markets, especially Sydney, the final auction clearance rate last weekend running at just 54.0% in Sydney and 62.0% in Melbourne – well down on the 74.0% and 77.9% clearance rates recorded respectively in the same weekend last year:
The weakness in both Sydney’s and Melbourne’s dwelling prices comes despite first home buyer (FHB) stamp duty concessions introduced in both states on 1 July 2017, which drove a 63% and 24% increase in FHB finance commitments respectively in the year to March versus the same month last year:
Accordingly, CoreLogic’s tiered monthly hedonic index shows that the top 25% of properties (“High Value”) in both Sydney and Melbourne have weakened the most, whereas the lowest 25% of properties (“Low Value”) have held up the best:
FHBs are being used as cannon fodder against a deeper housing correction.
