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Property values have finished the financial year on a high

 

HOUSE values rebounded in June leading to an almost 10 per cent jump during the financial year.

 

The latest CoreLogic RP Data home values results reveal capital city dwelling values went up by 9.8 per cent in the past year, not far off last year’s performance of 10.1 per cent.

 

CoreLogic RP Data head of research Tim Lawless said the values finished the year on a “strong footing” and rose by 2 per cent during the June quarter.

 

“The rate of capital gain was slightly higher over the second half of the year (5.1 per cent) compared with the first half (4.5 per cent) highlighting that the housing market has gathered some momentum during 2015,’’ he said.

 

This could have been driven in part by interest rates cuts in February and May.

 

Melbourne was the strongest performer during June with its values up by 2.9 per cent, although Sydney was close behind with a 2.8 per cent increase.

 

Hobart values increased 1.8 per cent, Brisbane, 1.7 per cent, and Adelaide 0.4 per cent.

 

Values dropped in Darwin by 3.9 per cent and Perth by 0.4 per cent.

 

Sydney was the strongest performer during the financial year with its values up by 16.2 per cent followed by Melbourne up 10.2 per cent.

 

CoreLogic RP Data research analyst Cameon Kusher said he thought the Sydney and Melbourne markets would continue to see growth in the coming months.

 

He said they had not initially predicted that values would grow at similar levels to the previous financial year.

 

“We thought that the market would have started to slow by now, so it is definitely stronger than we expected it to be, in particular in Sydney and Melbourne we thought those markets would slow more so than they have,’’ he said.

 

He said investment had driven a lot of that.

 

“People do not have another viable option as far as to where to park their money at the moment, so they are coming into the housing market and it is continuing to drive that market and of course the offshore buyers, they are seeing exchange rate benefits for housing, it is actually looking cheaper than it was 12 months ago to them as well.’’

 

Mr Lawless said there were other economic and demographic reasons for why Sydney and Melbourne had performed so strongly as well.

 

“These states are more sheltered from the mining sector downturn and have benefited from the strong multiplier effect of housing construction as well as a vibrant financial services sector,’’ he said.

 

“The Perth and Darwin markets are weakening in line with the downturn in the resources sector and an associated weakening in infrastructure investment and a marked slowdown in migration.

 

“Brisbane, Adelaide, Canberra and Hobart are seeing softer economic conditions and population growth compared with Sydney and Melbourne, however housing markets have shown some level of growth over the year,” Mr Lawless said.

 

He said looking forward into the next 12 months it was hard to imagine Sydney maintaining such a rapid pace of value growth.

 

“Not only is affordability becoming a challenge for many sectors of the market, but yields are substantially compressed, rents are hardly moving and investors are facing tighter financing conditions from lenders,’’ he said.

 

BEST PERFORMERS 2014/2015 FINANCIAL YEAR

 

Sydney 16.2%

 

Melbourne 10.2%

 

Brisbane 3.4%

 

Adelaide 4.5%

 

Perth -0.9%

 

Hobart 0.9%

 

Darwin -2.9%

 
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