Sydney property market still booming

The monthly CoreLogic Hedonic Home Value Index reported a further rise in the value of capital city dwellings in February, with values rising 1.4 per cent over the month.

The strongest capital gains over February was led by Canberra (+3.2 per cent) and Sydney (+2.6 per cent), with Melbourne (+1.5 per cent) and Hobart (+1.0 per cent) also returning significant increases.

In contrast, dwelling values were down over the month across Darwin (-4.3 per cent), Perth (-2.4 per cent) and Brisbane (-0.4 per cent).

CoreLogic head of research Tim Lawless said that at a combined capital city level, growth conditions have been rebounding since the middle of last year when, on two separate occasions, interest rates were cut and investor demand commenced trending higher.

“Prior to capital gains accelerating half way through last year, the growth trend had been moderating, reaching a cyclical low point over the twelve months ended July 2016 when the annual change in capital city dwelling values slowed to 6.1 per cent,” he said.

According to Mr Lawless, the February results mark a new high point in the current growth cycle, with capital city dwelling values increasing by 11.7 per cent over the past 12 months.

“The annual growth rate across the combined capitals hasn’t been this strong since the 12 months ending June 2010,” he said.

“In Sydney, where the annual rate of growth is now 18.4 per cent, this is the highest annual growth rate since the 12 months ending December 2002 when the housing boom of the early 2000’s started to slow.”

Mr Lawless said that Sydney and, to a lesser extent, Melbourne, have remained at the top of the capital gain tables over the past two cycles.

“Since the beginning of 2009, Sydney dwelling values have more than doubled, rising by 104.5 per cent while Melbourne values are 87.7 per cent higher,” he said.

The next best performing capital city over the same period was Canberra where dwelling values have risen by a comparatively modest 37.4 per cent.

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