Canberra housing values slightly up, while other capitals record second consecutive drop

Canberra housing values have again bucked the national trend, recording a slight increase for the second month in a row, while some other capitals have seen a second consecutive decrease.

According to the most recent CoreLogic Home Value Index data, prices on average around Australia were down 0.7% nationally in June, following a 0.4% decline in May.

The five largest capital cities all recorded a decline in home values over the month, with drops of 1.1% in Melbourne and Perth, 0.8% in Sydney, 0.4% in Brisbane and 0.2% in Adelaide.

According to the CoreLogic data, Canberra housing values remained strong, recording a 0.1% increase for the month, and a 0.7% increase for the quarter. Canberra also recorded a median dwelling value of $639,965 for June.

Both Hobart and Darwin also recorded subtle increases in June, with values up 0.3% in both cities.

Despite housing values being down nationally in June, market activity showed a further improvement, after the low recorded in April during the peak COVID-19 restrictions. After a 21.5% surge in sales activity throughout Australia in May, CoreLogic’s estimate of home sales in June was up a further 29.5%.

CoreLogic’s head of research Tim Lawless said the downwards pressure on home values has remained mild to-date, with capital city dwelling values falling a cumulative 1.3% over the past two months.

“A variety of factors have helped to protect home values from more significant declines, including persistently low advertised stock levels and significant government stimulus,” he said.

“Additionally, low interest rates and forbearance policies from lenders have helped to keep urgent sales off the market, providing further insulation to housing values.”

Despite the June value falls, the data shows an overall upswing across most regions, reflected in high annual growth rates. Housing values in Canberra increased in value by 6.3% annually, with the twelve month change also in positive territory in Sydney (13.3%), Melbourne (10.2%), Hobart (6.4%), Brisbane (4.4%) and Adelaide (2.0%).

“The only capitals where values show declines on an annual basis are Perth and Darwin, but even across these cities, home values were early into a recovery phase pre-COVID.” Mr Lawless said.

While the decline in home values has been fairly mild since April, Mr Lawless said the longer term outlook remains highly uncertain.

“While it is encouraging to see lenders have recently hinted at an extension in their repayment leniency policies, the government stimulus will eventually taper and banks will require borrowers to repay their loans,” he said.

“The longer term outlook for the housing market is largely dependent on how well the economy is tracking when these support measures are removed.”