03 Apr Property Market Update – April 2019
CoreLogic’s Hedonic Home Value Index, March 2019 showed another national drop in values with a 0.6% decrease in March. Locally Perth ‘s decline continued but at a much slower rate, seeing a 0.4% drop.
Nationally the values dropped by 0.6% for the month. For the capital cities only Hobart saw an increase in values (0.6%), Canberra held with no change and the biggest drops were felt in Sydney (-0.9%) and Melbourne (-0.8%).
The 0.6% decline in national dwelling values in March takes the annual decline to -6.9%. If there is a positive it is that last month was the lowest month-on-month decline since October last year (-0.5%).
Over the last five years values in most cities have increased with the exception of Perth and Darwin as shown in the chart below.
Capital city rents slipped 0.1% lower over the twelve months ending March 2019.
Mr Lawless said, “Sluggish rental conditions are likely the result of higher rental supply coupled with a reduction in rental demand. Higher supply can be attributed to the surge in investment activity over recent years, while the reduction in demand is the result of more renters converting to first home buyers.”
Despite sluggish rental conditions, gross rental yields are generally trending higher as rental rates outperform dwelling values.
Gross rental yields have moved off their record lows in Sydney and Melbourne, however, these cities are still recording the lowest gross rental yields amongst the capital cities at 3.5% and 3.6% respectively. Most other capital cities are recording gross rental yields
around the mid 4% range, with Darwin and Hobart showing a higher yield profile.
Regional markets are generally showing a higher gross rental yield relative to the capital cities which is a long standing trend.
Tim Lawless says that although the market is still losing that the downturn is starting to lose some steam.
With the federal election on the horizon, there may be more uncertainty ahead with tax implications for investors should there be a change of government.
The above information is taken from the CoreLogic Hedonic Home Value Index