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CoreLogic’s national Home Value Index posted a 0.3 per cent rise in February, marking the end of a short and shallow downturn that lasted just three months.
This improvement helped drag the national measure of home values 0.4 per cent lower for the period.
Though the February rise was subtle, it was broad-based, with every capital and ‘rest-of-state’ region, except Darwin (-0.1 per cent) and regional Victoria (flat), recording a monthly rise in values and marks the start of what could be an inflection in growth trends across the housing market, according to CoreLogic.
In particular, Melbourne and Hobart led the monthly gains. Both cities recorded the largest month-on-month change among the capitals, with values rising 0.4 per cent.
These cities had previously experienced some of the weakest growth, with Melbourne’s lift breaking a streak of 10 consecutive months of falling home values.
Conversely, the midsized capitals of Brisbane, Perth, and Adelaide have lost their mantle as the strongest growth markets. With a monthly change of 0.2–0.3 per cent, these cities were outpaced by Melbourne and Hobart.
Adelaide and Brisbane are still leading rolling quarterly growth trends, with rises of 1.2 per cent and 0.9 per cent, respectively. However, Perth’s value growth has slowed considerably, with downward revisions in recent months dragging the quarterly change to just 0.3 per cent.
The return to growth across Sydney and Melbourne is being driven by the more expensive end of the market. Upper quartile house values are leading the monthly gains in both cities, following the sharpest declines in high-value markets.
This stronger performance aligns with earlier research from CoreLogic, which indicated that premium housing markets in Sydney and Melbourne have historically been the most sensitive to rate cuts.
CoreLogic’s research director Tim Lawless said the improved housing conditions have more to do with improved sentiment than any immediate improvement in borrowing capacity.
“Expectations of lower interest rates, which solidified in February, look to be flowing through to improved buyer sentiment,” Lawless said.
“Along with the modest rise in values, we have also seen an improvement in auction clearance rates, which have risen back to around long-run average levels across the major auction markets.”
Regional housing conditions continued to show stronger growth compared to capital city counterparts in February.
Values across the combined regional index rose 0.4 per cent over the month and 1.0 per cent over the rolling quarter, compared to the 0.3 per cent monthly rise and 0.4 per cent quarterly fall seen in capital city values.
However, there has been some diversity in these trends, with Sydney, Melbourne, and Hobart recording a stronger monthly change compared to their regional counterparts.
[RELATED: Shifting growth patterns signal cooldown in some regional areas]
