The recovery of house prices in Melbourne and Sydney is accelerating according to CoreLogic’s Home Value Index results for October.
House Price Changes For October 2019
According to data collected by CoreLogic, national dwelling values increased by 1.2% during October 2019 and have increased by 2.9% over the quarter.
Australia’s biggest cities are seeing a sharp increase. The dwelling prices in Sydney rose 1.7% over the month and are up 5% in the three months to October 2019.
Melbourne house prices went up even faster. House prices increased 2.3% in October 2019 and in the past three months have risen by 5.5%.
House prices in Brisbane, Adelaide, Hobart and Canberra are up between 0.4% to 0.9% in October 2019. Canberra has led the recovery with house prices up 2.4% in the quarter to October 2019.
Looking at the resource-focused cities, Darwin house prices rose 0.3% in October, reversing a little of the declines in recent times. However, the Perth dwelling prices fell another 0.4% – over the past year it’s down 8.7%.
CoreLogic research director Tim Lawless said there were a number of reasons for the recovery in Melbourne and Sydney: Tighter labour market conditions and stronger population growth relative to the other capitals, coupled with the stimulatory effect of the lowest mortgage rates since the 1950’s, and improved access to credit. Stamp duty exemptions for first home buyers purchasing under specific price points have added additional stimulus to housing demand according to Mr Lawless.
Various real estate related businesses have reacted differently. Real estate agent business Mcgrath (ASX: MEA) has seen its share price rise 4.2%.
However, the major bank share prices are all down. The CBA (ASX: CBA) share price is down 0.8%, the Westpac (ASX: WBC) share price is down 0.85%, the ANZ (ASX: ANZ) share price is down 1.8% and the NAB (ASX: NAB) share price is down 0.6%.
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At the time of publishing, Jaz does not have a financial interest in any of the companies mentioned.