House prices rise in every capital city except Melbourne in October

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on November 02, 2020
House prices rise in every capital city except Melbourne in October

Photo by Thicia Luiza Zuqui on Unsplash

After five months of declines, Australian house prices have posted growth of 0.4% in October, according to CoreLogic.

Each capital city recorded an increase in home values, except Melbourne, which saw a 0.2% decline over the month. 

Despite the decline, the downward trend in the Victorian capital has been easing since mid-September, with the 0.2% decline the smallest month on month drop since the COVID-induced downturn. 

With private inspections now permitted, new property listings have surged and clearance rates have listed, with CoreLogic predicting house prices in Melbourne will soon recover. 

Buying a home or looking to refinance? The table below features home loans with some of the lowest variable interest rates on the market for owner occupiers.

Lender
Advertised rate Comparison rate* Monthly repayment Rate TypeOffsetRedrawOngoing FeeUpfront FeesLVRLump Sum RepaymentAdditional RepaymentsPre-approval

VariableMore details
LIMITED TIME OFFER

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
LIMITED TIME OFFER

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
VariableMore details
ZERO APPLICATION FEESFEE FREE OFFSET

Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)

  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
  • No upfront or ongoing fees
ZERO APPLICATION FEESFEE FREE OFFSET

Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)

  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
  • No upfront or ongoing fees
FixedMore details
USE A MARKET LEADING APP TO HELP YOU PAY OFF YOUR LOAN SOONER

Fixed Home Loan 1 year (Principal and Interest) (LVR < 80%)

  • Make up to $20,000 additional repayments per fixed term
  • Redraw available – lets you access any extra loan repayments you’ve made
  • Choose to rate lock for 90 days (fee applies)
USE A MARKET LEADING APP TO HELP YOU PAY OFF YOUR LOAN SOONER

Fixed Home Loan 1 year (Principal and Interest) (LVR < 80%)

  • Make up to $20,000 additional repayments per fixed term
  • Redraw available – lets you access any extra loan repayments you’ve made
  • Choose to rate lock for 90 days (fee applies)
VariableMore details
REFINANCE IN MINUTES, NOT WEEKS

Variable Owner Occupied, Principal and Interest (Refinance Only)(LVR <75%)

  • No application or ongoing fees.
  • 100% free offset sub account.
  • Fast online application, approval in minutes not weeks.
  • Mobile app, Visa debit card, Apple and Google Pay
  • Refinance loans and variable rates only.
REFINANCE IN MINUTES, NOT WEEKS

Variable Owner Occupied, Principal and Interest (Refinance Only)(LVR <75%)

  • No application or ongoing fees.
  • 100% free offset sub account.
  • Fast online application, approval in minutes not weeks.
  • Mobile app, Visa debit card, Apple and Google Pay
  • Refinance loans and variable rates only.

Rates correct as of January 24, 2022. View disclaimer.

CoreLogic’s Head of Research Tim Lawless said the October results show a stark contrast between house and unit market performance. 

“The rise in capital city housing values over the month was entirely attributable to a 0.4% lift in house values which offset the 0.2% fall in unit values," Mr Lawless said.

"Through the COVID period so far, unit values have actually shown a smaller decline in values than houses, but this is likely to change.”

“Almost two-thirds of Australian units are rented, and rental conditions have weakened, especially in the key inner-city precincts of Melbourne and Sydney."

Change in dwelling values as at October 31, 2020

Month 

Quarter 

Annual 

Median value

Sydney

0.1%

-0.6%

8.8%

$860,955

Melbourne

-0.2%

-2.2%

0.7%

$666,240

Brisbane

0.5%

0.9%

3.5%

$510,353

Adelaide

1.2%

2.0%

4.4%

$455,425

Perth

0.6%

0.9%

0.0%

$456,267

Hobart

1.0%

1.6%

6.5%

$498,073

Darwin

1.2%

3.9%

2.8%

$398,910

Canberra

1.0%

1.9%

6.8%

$656,739

Combined capitals

0.2%

-0.5%

3.7%

$638,264

Combined regional

0.9%

1.3%

4.8%

$403,181

National 

0.4%

-0.1%

3.9%

$559,254

Source: CoreLogic

Mr Lawless said unit markets were suffering as a result of little to no overseas migration, low levels of investment, and high stock levels. 

Regional markets continued to outperform the capitals, even withstanding much of the COVID-related downturn. 

In the seven months since March, regional dwelling values are up 1.7%, while values across the capitals have fallen by 2.3%. 

“The newfound popularity of working from home is only one factor helping to support regional home prices," Mr Lawless said.

"More affordable price points, lower densities and lifestyle factors, are also under-pinning the relative strength across many regional areas of the country.”

Mr Lawless added the lift in home values coincided with a range of other improved indicators in recent months. 

“Consumer confidence has consistently improved since the virus curve has once again flattened and Australians respond positively to measures announced in the federal budget," he said. 

"In October we saw an 11.9% surge in the Westpac-Melbourne Institute consumer sentiment index, rising clearance rates and an increase in valuation for purchase orders.

"Alongside this we are seeing persistently low advertised stock, which has supported price growth.“

Despite a surge in new listing numbers, total advertised stock remains close to record lows, with new listings increasing by 25.2% but total stock levels growing by less than 1%. 

House rents and unit rents diverge 

The pandemic period has seen a substantial divergence between house and unit rents. 

Between March and October, capital city unit rents were down a cumulative 4.8%, while houses recorded a 0.4% rise in rents.

This divergence continued through October with the monthly data showing a 0.7% drop in capital city unit rents while house rents are up 0.5%.

The difference between house and unit rental performance was most significant in Melbourne and Sydney where, since March, unit rents are down 6.6% and 5.8% respectively while house rents have seen a more mild reduction of around 1%.

Mr Lawless said the divergence could be attributed to a combination of supply and demand factors. 

“Both cities have a multiyear history of significant supply additions to the high-rise unit sector where the large majority of properties are owned by investors," he said.

"From a demand side, the evaporation of overseas migrants, including foreign students, has led to a sudden and material drop in the number of renters requiring accommodation.

"Additionally, weaker labour market conditions across industries where workers are more likely to rent than in any other sector have further impacted rental demand.”


Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered. Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site. Savings.com.au, yourmortgage.com.au, yourinvestmentpropertymag.com.au, and Performance Drive are part of the Savings Media group. In the interests of full disclosure, the Savings Media Group are associated with the Firstmac Group. To read about how Savings Media Group manages potential conflicts of interest, along with how we get paid, please visit the web site links at the bottom of this page.

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Alex joined Savings.com.au as a finance journalist in 2019. He enjoys covering in-depth economical releases and breaking down how they might affect the everyday punter. He is passionate about providing Australians with the information and tools needed to make them financially stable for their futures.

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