Melbourne is the only capital city to have experienced double-digit annual home price growth, according to CoreLogic.
MELBOURNE remains the only capital city to have experienced double-digit annual home price growth, confirming its status as Australia’s most resilient property market.
CoreLogic RP Data’s latest Home Value Index shows dwelling values in Victoria’s capital have risen 10.1 per cent over the past 12 months, placing it ahead of Australia’s most expensive market, Sydney, which had an annual improvement of 8.9 per cent.
But Melbourne’s year-on-year growth has slowed, falling from a recent peak of 14.2 per cent.
The city’s median dwelling price increased just 1.1 per cent in April and 0.8 per cent over the most recent quarter to $585,000, according to CoreLogic.
This was below Sydney’s respective 2.4 per cent and 3.9 per cent growth, resulting in a median of $780,000.
Over Australia’s current growth cycle, which began in June 2012, Melbourne has enjoyed a 37.1 per cent increase in home prices, second only to Sydney’s 52.7 per cent rise.
CoreLogic senior research analyst Cameron Kusher said Melbourne’s market was still showing “very strong growth” despite the slowdown.
Mr Kusher said houses continued to well and truly outperform units for price growth in the city, with the former rising 10.8 per cent over the past year and the latter just 4.7 per cent.
“(Melbourne is) seeing a pretty wide gap between the performance of houses and units,” Mr Kusher said.
“That reflects the concern about the amount of new unit stock coming online, especially because … they are very much focused in that 5km to 10km radius of the city.”
The report also shows that Victoria’s capital continues to show the country’s lowest gross rental yields — 2.9 per cent for houses and 4 per cent for units.
CoreLogic research director Tim Lawless said this suggested that Melbourne’s most recent investors were “likely to be utilising a negative gearing strategy to offset their cash flow losses against their taxable income”, despite the low interest rate settings.
“Buyer demand continues to be supported by mortgage rates that are close to historic lows,” Mr Lawless said.
“With the likelihood of interest rate increases in the foreseeable future almost non-existent due to the negative March quarter inflation reading, buyer demand is likely to remain high for housing.”
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