The deflation of Sydney’s and Melbourne’s housing markets rolls on, with both jurisdictions reporting further price falls this week.
In Sydney, values fell by 0.11% in the week ended 7 June, according to CoreLogic:
Sydney home values have now declined by a cumulative 4.8% over the past 39-weeks, with values also down 4.7% over the past 44 weeks.
By comparison, Melbourne dwelling values fell by another 0.07%, which follows the prior two week’s hefty falls. Melbourne dwelling values have now also declined by 1.7% over the past 27 weeks:
Sydney’s quarterly growth rate remains firmly negative, down 0.85% according to CoreLogic:
Whereas, Melbourne’s quarterly value losses have risen to 1.18%:
However, Sydney’s annual losses at running 4.3% versus Melbourne’s gain of 1.9%:
As noted earlier this week, first home buyer (FHB) stamp duty incentives were introduced in both NSW and VIC from 1 July 2017, which have helped prop-up values at the more affordable end of both city’s housing markets.
As shown in the next chart, CoreLogic reports that the bottom 25% of dwellings by value in Sydney fell by just 0.2% in the May quarter, versus a 1.0% decline across the middle 50% of properties by value, and a 1.5% decline across the top 25% of properties by value:
Similarly over the year, the bottom 25% of dwellings in Sydney fell by just 0.3% as at May, versus a 2.4% decline across the middle 50% of properties by value, and a 7.1% decline across the top 25% of properties by value:
Likewise in Melbourne, CoreLogic reports that the bottom 25% of dwellings in Melbourne actually rose by 0.7% in the May quarter, versus a 0.8% decline across the middle 50% of properties, and a 1.9% decline across the top 25% of properties by value:
Whereas over the year, the bottom 25% of dwellings in Melbourne rose in value by 10.3% as at the May, versus a 4.5% increase across the middle 50% of properties, and a 1.1% decline across the top 25% of properties:
The above charts suggest that dwelling prices would have fallen much further in Sydney and Melbourne if not for the FHB bribes implemented by both state governments.
Finally, CoreLogic’s monthly stratified median index shows almost identical annual value losses in Sydney to its hallmark hedonic index (i.e. -4.4% versus -4.2%):
Whereas CoreLogic’s stratified median index shows stronger annual growth in Melbourne (4.3%) than its hedonic index (2.2%), albeit with similar trends:
Regardless, both markets have entered a correction phase.
