The RP Data-Rismark June Hedonic Home Value Index has revealed capital city dwellings experienced an increase in value of 3.8 per cent for the 2013 financial year.
According to the research, the jump in values represented a significant improvement from the previous financial year, when values fell by 3.6 per cent.
The capital gains reflected in the results were evidence of the positive impact lower mortgage rates were having on the housing market, RP Data research director Tim Lawless said.
“Since values bottomed out we’ve see a rise of about 4.9 per cent. So the conditions are relatively strong conditions in the sense that we are seeing an ongoing recovery in the market place, but quite different to what we saw in 2009,” Lawless told selfmanagedsuper.
In addition to the full financial year results, capital city dwellings rose in value by 3 per cent over the first six months of 2013, and recorded a broad-based increase across each capital city in June.
“A better way to look at the marketplace is on a quarterly basis and here we are seeing most of the growth across the capital cities at least being driven by Sydney and Perth,” Lawless said.
“Sydney’s certainly showing some very strong fundamentals at the moment, however, there are a few question marks surrounding Perth just about how long the recovery trend will continue there, considering we’re moving out of a pretty strong infrastructure boom.
“I think Sydney stands out as being the best marketplace at the moment for fundamentals and we’re also seeing a fairly tight housing market there in terms of housing supply and rents are rising.”
While Sydney and Perth produced strong results over the quarter, Brisbane and Melbourne did not match their counterparts and experienced a slight reduction in values.
“Brisbane has been a relatively weak performer since 2007 and we aren’t really seeing it gather much pace in terms of a recovery at the moment. Over the past year, values in Brisbane are only up by 0.6 per cent,” Lawless said.
“Melbourne on the other hand though has had a very strong run of growth and now its yields are the lowest of any capital city due to the fact rents just haven’t grown as much as what capital values have. We’re also seeing some supply issues coming into that market around the inner-city unit market and the outer fringe detached housing market.”
