According to CoreLogic’s February Hedonic Home Value Index, dwelling values across Australia dropped by 0.1% in February. This takes housing values lower by 0.8% since they
peaked in September 2017. These recent declines mark the fifth consecutive month of housing value declines since March 2016.
The report stated, “there continues to be a divergence between capital city and regional markets, with the combined capital city index falling by -0.3% over the month, compared
to a 0.4% increase in combined regional values.” Throughout February dwelling values dropped in every capital city except for Hobart and
Adelaide. Dwelling values grew by 0.7% in Hobart and remained unchanged in Adelaide. The largest declines in dwelling values occurred in Darwin and Sydney, recording -0.9%
and -0.6% respectively. Dwelling values dropped by -0.1% in Melbourne, -0.1% in Brisbane, -0.2% in Perth, and -0.3% in Canberra.
From an annual perspective over the 12 months to February, dwelling values increased by 2.2%. This is the slowest annual growth rate since August 2016.
While dwelling values have softened, rental rates have risen over the same period. Rental rates have been higheracross all the capital cities, except Perthand Darwin. According to CoreLogic’s report, “the markets experiencing the greatest increases in rents over the past year have been Hobart (10.2%) which has recorded double-digit
annual rental growth for the first time since August 2009 and regional Tasmania (7.6%) which is experiencing the strongest rental growth since the end of 2008.”
These softening dwelling values in conjunction with increasing rental rates, demonstrate that 2018 could be a good year to continue growing your portfolio. As always, you
should undertake your own research and due diligence when expanding or making changes to your investment portfolio.