Sensational home price gains in Melbourne and Sydney over the last month are encouraging the national average dwelling values to move slightly higher. However, analysts are cautioning that the bump in August probably isn’t the start of a new boom.
Capital home prices rose by around 1% in August, driven by 1.4% and 1.6% rises in Melbourne and Sydney respectively. Additionally, five of the eight capital cities in the country had major price rises, while Perth, Darwin, and Adelaide continued to fall.
According to CoreLogic, the monthly home value index showed an average of around 0.8% rise in dwelling values nationally, although Sydney’s gain was twice that size. Additionally, Melbourne’s 1.4% monthly gain made a huge dent in the overall result.
No other capitals in Australia came close to the impact offered by Melbourne and Sydney together. Canberra achieved a 0.8% rise, while Brisbane managed 0.2% and Hobart achieved 0.5%. Regional markets beyond the capitals lagged too.
Moving Forward in the Housing Market
The prices for property have risen modestly for the previous two months of Winter in Melbourne and Sydney. However, the results in August really made a significant change to the market, providing much greater growth than any expert would have predicted. Tim Lawless of CoreLogic said that the extra stock coming into the market at this time of year would probably constrain further house price gains going forward.
As spring arrives, the experts believe more stock will be flowing into the market. However, there haven’t been as many properties in the market over the last few years. As vendor confidence improves, that may well change, however. AMP capital economist Shane Oliver agrees, thinking that the rebound will be limited to an increase of around 5% in Sydney and Melbourne across the next year or so.