National dwelling values drop for ninth consecutive month led by Melbourne slowdown: CoreLogic

Dwelling values across the country have slipped a further 0.2 percent over the month of June to be 0.8 percent lower over the year, according to CoreLogic's June Home Value Index.

It's the ninth consecutive month on month fall in national dwelling values, taking them 1.3 percent less than their September peak.

Melbourne was one of the weakest performers over June, with its 0.4 percent declines only being topped by Perth (0.5 percent).

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CoreLogic research director Tim Lawless said despite recent and consistent monthly falls, national dwelling values remain 32.4% higher than five years ago.

“This highlights the wealth creation that many home owners have experienced over the recent growth phase, but also the fact that recent home buyers could be facing negative equity.”

“Tighter finance conditions and less investment activity have been the primary drivers of weaker housing market conditions and we don’t see either of these factors relaxing over the second half of 2018, despite APRA’s 10 per cent investment speed limit being lifted this month.”

The June quarter results saw national dwelling values fall by half a percent, driven by a 0.8% drop in values across the combined capital cities.

The capital city decline was partially offset by a 0.6% rise in values across the combined regional markets.

The largest decline amongst the capitals over the June quarter was in Melbourne, with dwelling values down 1.4%, followed by Sydney (-0.9%), Darwin (-0.8%) and Perth (-0.7%).

Hobart continues to show the strongest capital gain trend amongst the capital cities with dwelling values rising a further 2.3% over the past three months. Although housing market trends remain very positive across Hobart, the quarterly pace has eased relative to the March quarter when values were up 3.4%. Values also trended higher across Adelaide (+0.9%), Brisbane (+0.3%) and Canberra (+0.2%) over the second quarter of 2018.

Declines are more pronounced across the most expensive quarter of the market. Based on the CoreLogic stratified hedonic index, values across the most expensive quartile of capital city properties were down 1.5% over the past three months while the least expensive quartile saw values hold firm. Similarly, over the past twelve months, the most expensive end of the market recorded a decline of 3.6%, while the least expensive end of the market recorded a 1.4% gain.

Declines across the most expensive sector of the capital city market is largely attributable to the declines in Sydney and Melbourne, where the upper quartile of property values fell by 7.3% and 2.5% respectively over the past twelve months.

“A surge in first home buyer activity has helped support demand across the more affordable price points in these cities," Lawless said.

Despite its capital city dwelling market cooling, some of the more affordable regions of Melbourne remain in a strong growth position.

Across the capital cities regions, five of the top 10 best performing areas over the last financial year came from across the outer areas of the Melbourne metropolitan area.

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The Mornington Peninsula showed the highest annual capital gain outside of Hobart.