CoreLogic says Sydney, Melbourne house prices up in June despite cooling
Sydney and Melbourne housing prices continue to defy a cooling, posting another price rise in the month of June, according to Corelogic’s June Home Value Index.
While foreign buyers were once thought to be mainly responsible for the the rise in house prices in the last three years, local homebuyers and investors showed their buying power buoyed by record low interest rates. The major banks have all ceased foreign lending.
For the first half of the year, capital city dwelling values have moved 5.5 per cent with the most substantial capital gains located in Sydney at 8.9 per cent, Hobart, 8.5 per cent and and Melbourne at 5.8 per cent. These numbers were smaller than the same time last year.
“While the higher rates of capital gains in Sydney and Melbourne can be tied back to strong economic conditions, and high rates of population growth, the same cannot be said for Hobart where economic conditions and migration rates are gradually improving from a low base,” Mr Lawless said.
While the rebound in the last few months watered down the cooling that started in the final quarter of 2015, Corelogic research director Tim Lawless said the those gains are starting to slow.
“The monthly growth rate reduction is likely to be very much welcomed by state and federal government policy makers and regulators who may be concerned about a sustained rebound in capital gains,” he said.
Mr Kusher also predicted there would be reprieve for Sydney and Melbourne in the second half of the year and spring, the traditional property buying season, could be a “fizzer”.
“We’re seeing homes in the city taking longer to sell and vendors are starting to offer larger discounts on their asking prices in order to make a sale.”
“In balance, Australia’s two largest cities are facing increased affordability challenges that are likely to negatively impact the trajectory of dwelling values and activity as more prospective buyers are blocked from the market.”
As a consequence of rising prices, gross rental yields continue to slip nationally, pushed mainly by the deterioration in Sydney and Melbourne.
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