House prices in Sydney and Melbourne are up for the first time since the crest of the property boom in 2017 and are potentially leading a recovery trend, according to data firm Corelogic.
June housing market results released on Monday showed Sydney and Melbourne dwelling values recorded a slight rise in June, up 0.1 per cent and 0.2 per cent respectively.
It’s the first monthly increase in Sydney values since the market peak in July 2017 while Melbourne dwelling values haven’t risen since the market moved through a peak in November 2017.
CoreLogic head of research Tim Lawless said the May federal election and a 25 basis point interest rate cut in early June may have played a role but improving conditions through to mid-May were largely “organic”.
The 0.2 per cent fall in national dwelling values was the smallest month-on-month decline in the national series since March 2018 and largely down to the newfound resilience in the NSW and Victorian capitals.
“(This) subtle rate of decline was heavily influenced by trends across Sydney and Melbourne where the pace of falling home values has been consistently reducing over the year to date,” Mr Lawless said.
Since peaking, Sydney’s top quartile values are down 17.1 per cent and Melbourne’s top quartile is down 15.8 per cent with both cities recording much larger falls across the top quartile relative to the broader market.
“Potentially we are seeing the first signs that the top end of Sydney and Melbourne’s housing markets are leading the recovery trend,” Mr Lawless said.
The only other regions to record a rise in housing values over the month were Hobart with a 0.2 per cent rise, as well as a 0.1 per cent lift for regional South Australia and a 0.2 per cent lift for the Northern Territory.
Monday’s Corelogic data showed, on a quarterly basis, every capital city housing market has recorded a drop in value, highlighting the broad geographic scope of this housing market downturn.
The largest falls over the past three months were recorded in Darwin (-3.6 per cent) and Perth (-2.1 per cent) where the weaker trend has persisted since mid-2014.
Adelaide recorded the smallest decline amongst the capitals over the quarter, with values down 0.4 per cent.