Latest NewsSydney Still the Leader of the PackTuesday, 30 May 2017

Based on the May RP Data-Rismark Home Value Indices results, over the past year Sydney has been the only capital city in Australia to record an improvement in home values.

Across the combined house and unit market, values are up 1 per cent; a far cry from the 12.9 per cent gain recorded over the year to March last year, which marked the peak in the latest growth phase.

Sydney values recorded a slight improvement over the year to May, but Perth values were down 7.5 per cent and Brisbane values fell by 5.9 per cent.

These two weakest-performing housing markets are yet to show any sign of turning around despite the economic benefits associated with the much-touted resources boom, of which Western Australia and Queensland are central players.

The nation's second-biggest capital city, Melbourne, is now recording values down by 2.9 per cent over the year to May.

The recent drop in the city's values comes on the back of an almost 50 per cent rise in home values since the start of 2007.

Over the month of May, Sydney home values remained virtually flat, recording a rise of 0.3 per cent across the combined house and unit market.

Splitting the two housing types apart shows that the unit market continues to well and truly outperform detached homes.

Unit values are up 3 per cent over the year, compared with house values, where the rise has been just 0.1 per cent.

Sydney's rental markets have continued to tighten. Rents are up 5 per cent over the year compared with a 3 per cent lift across the combined capital cities benchmark.

With home values remaining fairly flat and rents heading north, rental yields are consequently rising.

The average Sydney house is now realising a 4.3 per cent yield on detached houses and a 5.1 per cent yield on units. Both readings are slightly higher than the combined capital city average.

There are several factors that are likely to keep a firm lid on price appreciation in Sydney. We don't expect values to show a material fall; however, the likelihood that Sydney's market will slip into the red on an annual basis over the coming months remains a distinct possibility.

The number of homes available for sale remains high, with about 19 per cent more listings on the market than at the same time last year.

While effective supply levels are high, buyer demand has fallen away, with transaction volumes now tracking about 4.6 per cent below the five-year average.

Previous Next

Share This Article




Previous Articles