The Australian housing market has been split in two speeds, with Sydney and Melbourne values flatlining while the mid-sized capitals continue to record a solid rate of gain at more than 1% month-over-month in February.
Perth home values had the greatest growth of 2.3%, adding more than A$22,500 to the median dwelling value.
Sydney and Melbourne have been less resilient to the February rate hike, with home values remaining flat for the month and down 0.1% and 0.4% over the rolling quarter, respectively.
Cotality research director Tim Lawless said that while Melbourne and Sydney traditionally lead Australia’s housing cycles, there have also been periods where the market moves in a counter-cyclical pattern.
“The clear slowdown in housing conditions across Sydney and Melbourne could signal an easing in growth conditions elsewhere down the track, but for now, the mid-sized capitals continue to see support from extremely low inventory levels, which is boosting the growth in values,” he said.
In the four weeks to February 22, Perth listings remained 48% below their five-year average, with Brisbane 31% below and Adelaide 23% lower.
While advertised stock levels are also low in Sydney and Melbourne, they are only 1% and 4.2% down on five-year average levels, respectively.
Melbourne and Sydney have also seen a clear pickup in the flow of new listings through February, with freshly advertised stock 9.7% above the five-year average in Sydney and almost 12% higher in Melbourne.
“Vendors are looking more motivated in Sydney and Melbourne, possibly looking to beat a further softening in selling conditions as clearance rates ease and demand slows,” Lawless said.
“If the typical seasonal pattern holds, the flow of new listings is likely to strengthen leading into Easter.”
The more affordable end of the market is delivering strong growth.
In Sydney, the lower quartile house values were up 0.8% over the month, while the upper quartile house values dropped 0.9%.
The same trend can be seen to some extent in other capital cities.
Lawless said this is because there is a lot of competition for lower-priced properties.
“First home buyers, investors and subsequent buyers are all competing across this sector of the market, while credit is less available across the higher price points due to serviceability constraints,” he said.
A similar trend can be seen in regional markets, which are outperforming capitals across New South Wales, Victoria, South Australia and Tasmania, with more resilient demand due to the lower price points and evidence of rising internal migration rates.
