Housing Values

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EXPERT OBSERVER
There has been a surge in demand for properties located in coastal and hinterland ‘lifestyle’ regions and towns.
While a great deal has been written about the resurgence in the so called ‘sea change’ phenomenon, many of the prime hinterland regions within close proximity to Australia’s capital cities have also benefited from a renewed ‘tree change’.
Here is an analysis on the trend around tree change activity in Australia, with some interesting results.
I found that although the pace of capital gains is generally easing, a variety of factors have contributed to renewed demand for properties outside the cities. A large part of it must be attributable to the ‘wealth effect', where home owners (particularly those in Sydney and Melbourne) have seen a substantial wealth boost via their property holdings. Couple this with a large cohort of baby boomers seeking out holiday homes or relocation options as they shift into retirement age, and the demand picture becomes more pronounced.
<img src="https://www.urban.com.au/images/2018/9/27/Timothy%201.JPG" alt="">
Perhaps another element is the growing acceptance and popularity of ‘telecommuting’ thanks to faster internet speeds, wider employer acceptance of working from home and broader availability of technologies such as VPN, which provides a secure virtual office environment for staff working remotely.
A final piece of the puzzle comes back to housing prices and affordability. It’s often the case that hinterland properties will provide a lower entry point to the market relative to their coastal or big city counterparts, especially when you take into consideration that typical block sizes are much larger. Looking across some of the most popular hinterland regions adjacent to the capital cities shows a broad range of values and historic growth conditions.
<img src="https://www.urban.com.au/images/2018/9/27/Timothy%202.JPG" alt="">
Across the selected regions, the hinterland areas of the NSW Southern Highlands and the Macedon Ranges in Victoria show the most significant value premium. The median dwelling value across the Southern Highlands of NSW is just over $735,000, while the Macedon Ranges have a typical dwelling value of roughly $700,000 – not cheap, but both regions show a lower median dwelling value relative to their respective capital cities.
At the other end of the spectrum is Tasmania’s Central Highlands, where the typical house is worth just over $200,000. The regions to see the strongest growth over the past five years are generally very different to the best performers over the past twelve months. The hinterland areas peripheral to Sydney have dominated the capital gain stakes over the past five years, however growth in those areas has slowed substantially over the past twelve months.
The regions to see the strongest growth over the past five years are generally very different to the best performers over the past twelve months. The hinterland areas peripheral to Sydney have dominated the capital gain stakes over the past five years, however growth in those areas has slowed substantially over the past twelve months.
<img src="https://www.urban.com.au/images/2018/9/27/Timothy%203.JPG" alt="">
The past twelve months has seen the Gold Coast hinterland record the fastest rate of capital gain, with dwelling values up 8.1%, followed by Vic’s Macedon Ranges where growth seems to have rippled away from the previously more popular Yarra Ranges.
Gold and Sunshine Coast hinterland regions
The South East Queensland hinterland regions are continuing to see values rise, although the trends are moving in different directions across the Gold Coast and Sunshine Coast hinterlands. The Sunshine Coast hinterland has seen the annual pace of capital gains ease from 6.0% a year ago to 2.2% over the twelve months ending August 18. Conversely, the Gold Coast hinterland is recording an acceleration in capital gains, with the pace of annual growth rising from a recent low of 1.2% per annum earlier this year to the current annual pace of 8.1%.
<img src="https://www.urban.com.au/images/2018/9/27/Timothy%204.JPG" alt="">
Sydney and Northern New South Wales hinterland regions
Each of the selected hinterland areas of NSW have seen a consistent reduction in the pace of capital gains, with the Blue Mountains slipping into negative annual growth for the first time since early 2012. Dwelling value growth was stronger across the markets adjacent to the Sydney metro area over the recent growth cycle. Both the Blue Mountains and Southern Highlands have seen dwelling values rise at slightly more than 9% per annum over the past five years, pushing dwelling values substantially higher relative to hinterland region of northern NSW where the average annual growth rate has been much lower at 3.9%.
<img src="https://www.urban.com.au/images/2018/9/27/Timothy%205.JPG" alt="">
 Melbourne hinterland regions 
The Yarra Ranges have substantially outpaced the Macedon Ranges based on capital gains over the past five years. Properties within the Yarra Ranges have recorded an average annual rise of 7.8% over the past five years compared with the Macedon Ranges where values have tracked 2.6% higher each year on average. Despite the strong capital gains across the Yarra Ranges, Macedon Range properties hold a $26,000 premium over Yarra Range properties based on the median value across both regions.
<img src="https://www.urban.com.au/images/2018/9/27/Timothy%206.JPG" alt="">
Hobart and Adelaide hinterland regions
While growth conditions slow down across Hobart, the Central Highlands has seen some momentum gathering with the pace of capital gains accelerating over the past year. Values were up 6.8% over the past twelve months compared with the five-year average rate of growth tracking at 5.1%. The Adelaide Hills shows far less volatility, however values are in across the hinterland region of Adelaide continue to trend higher, up 0.8% over the past twelve months, down from 2.1% annual growth a year earlier.
<img src="https://www.urban.com.au/images/2018/9/27/Timothy%207.JPG" alt="">
Perth hinterland regions 
Perth’s eastern hinterland regions have shown a similar trend the broader Perth metro region, with dwelling values generally tracking lower since 2015. The Kalamunda region has seen dwelling values fall by 15.9% since the market peak, while values have fallen even further across Mundaring, down 19.9% since the market peak. The silver lining to the downturn is that housing prices are now around the same as they were in 2006/2007.
<img src="https://www.urban.com.au/images/2018/9/27/Timothy%208.JPG" alt="">
Tim Lawless is CoreLogic's head of research
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tlawless-5VLUrbAk9s

Tree change and hinterland property markets back in vogue: Tim Lawless 

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Sydney house values fell 9.2 percent over the past year, their largest annual fall since May 1983.
Overall Sydney dwelling values fell 8.1 percent over the past year.
Unit values declined by 5.5 percent.
<img src="https://www.urban.com.au/images/2018/12/3/CoreLogic%20Hob%20vs%20Per%201.JPG" alt="">
Headlining the November results, the CoreLogic hedonic home value index recorded its weakest month-on-month change in dwelling values since the Global Financial Crisis.
National dwelling values slipped 0.7 percent lower in November, led by larger falls in Sydney (1.4 percent) and Melbourne (1 percent) where the pace of decline has accelerated over the past month.
Nationally, dwelling values are down 4.2 percent since peaking in October last year, with dwelling values retracing back to levels last seen in December 2016.
<img src="https://www.urban.com.au/images/2018/12/3/CL%20Dec%203.JPG" alt="">
CoreLogic head of research Tim Lawless said the downwards pressure on national dwelling values is largely confined to Sydney and Melbourne which together, comprise approximately 55 percent of the value of Australia's housing asset class.
Since peaking in July last year, Sydney's housing market is down 9.5 percent which is on track to eclipse the previous record peak-to-trough decline set during the last recession when values fell 9.6 percent between 1989 and 1991.
Melbourne dwelling values peaked four months later than Sydney, in November 2017, and have since fallen by 5.8 percent through to the end of November 2018.
"Conditions across the Australian housing market are increasingly diverse," Lawless said.
Dwelling values are trending higher across five of the eight capital cities, albeit at a relatively slow pace compared with the previous surge in Sydney and Melbourne.
"Hobart and regional Tasmania continue to be the standouts for capital gain, with values up 1.7 percent across both regions over the past three months".
Tim Lawless points towards several factors that are influencing the downwards trend in Sydney and Melbourne, while other regions continue to see some level of growth.
"The tightening in finance conditions has been more pronounced across the investor segment of the market, where Sydney and Melbourne have recorded much higher concentrations of investment demand.
"Additionally, housing affordability constraints are more pronounced in these markets and rental yields are substantially lower, indicating an imbalance between rental values and dwelling values.
"The ramp up in housing supply has been more pronounced in these markets against a backdrop of slowing demand, and Sydney and Melbourne have also been more affected by the reduction in foreign buying activity."
"As a consequence of less market activity, advertised listings have surged higher, providing buyers with ample choice which provides for a strong negotiation position on price.
"The rebalancing towards buyers over sellers in Sydney and Melbourne is clear across CoreLogic's vendor metrics, with clearance rates tracking in the low 40 percent range while private treaty sales are showing substantially longer selling times and larger rates of discounting than they have over recent years."
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j.ballantyne1990-6AQqhLzZaK

Sydney house values fell 9.2 percent over the past year, their largest annual fall since May 1983.

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Melbourne is the best performing capital city over the three months to September with a 7.4% rise in dwelling values, according to CoreLogic RP Data's Home Value Index.
Melbourne houses had a gross rental yield of 2.9% and units on par with Sydney at 4.1%
Highest rental yields were recorded in Darwin, with houses reaping a grow rental yield of 5.4% and units at 5.8%
CoreLogic RP Data head of research Tim Lawless said the first month of Spring provided mixed results across the capital city housing markets with the headline results showing a 0.9% rise in capital city dwelling values over the month, and a 4.0% increase over the September quarter.
"Across the capital cities, the month-on-month results ranged from a 2.4% rise in Melbourne dwelling values, through to a 1.9% fall in values across the Hobart market. Australia’s largest and most expensive capital city housing market, Sydney, posted a month-on-month gain of just 0.1% in September," he said. "During the September quarter, half of Australia’s capital cities posted a decline in dwelling values with Hobart down 2.0% over the three months. Adelaide values slipped by 1.6%, Perth by 0.7%, and Canberra values were down 0.4%.  The most substantial capital gains over the quarter were achieved in Melbourne where dwelling values were up by 7.4%, followed by Sydney (+4.6%), Brisbane (+1.9%) and Darwin where values were up by 0.4%."
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mick.cee-iDmgDDAmu8

Melbourne takes the baton of strong housing price growth: CoreLogic RP Data

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Detached housing values in Melbourne have increased 12.3% higher over the year, eclipsing the 4.8% rise in unit values.
CoreLogic RP Data’s head of research Tim Lawless said the difference in value increases between houses and units could be related to supply.
"The underlying land component driving detached housing values higher at a time when new apartment supply has seen a substantial boost from new construction,” Mr Lawless said. 
According to the CoreLogic RP Data July Home Value Indices 2015 report, Melbourne's capital rate gain surpassed Sydney over the last three months posting 6.1% to the three months ending July 31. Capital gain in Sydney for the quarter ams in at 5.4%.
Mr Lawless said growth in Sydney wasn’t quite as strong over the rolling quarter, which is the highest rate of growth since the March quarter this year (5.8%). 
“To date, the capital cities have seen remarkable differences over the growth cycle which broadly commenced at the end of May 2012 and since that time dwelling values across our combined capitals index have increased by 30.4%," Mr Lawless said.
"Sydney values are 47.9% higher over the current cycle and Melbourne values are 32.1% higher while every other capital city has seen growth of less than 13% over the same period. This highlights the extent to which the Sydney and Melbourne markets have outperformed other markets over the past three years. 
“While Sydney and Melbourne values continue to boom, the next best performing city, Brisbane, has seen dwelling values rise by just 3.9% over the past twelve months. Based on the median dwelling price, Sydney prices are now 72% higher than Brisbane’s and Melbourne’s are 24% higher,” he said.
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