PERTH’S long-running housing downturn could finally be over, with values rising in February.
They increased 0.3 per cent during the month according to the latest CoreLogic home value index and were up 0.4 per cent over the rolling quarter.
While the increase may be small, it has been four consecutive months since dwelling values have fallen.
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READ NOWHead of research Tim Lawless said it was a trend not seen since the market peaked in mid-2014.
“Although Perth values are now trending higher, the recovery period is likely to be a long one, with housing values remaining 21.0 per cent below their peak,” he said.
Growth was not across the board, with only Perth’s inner and south west regions recording increases.
Nationally home values increased 1.1 per cent over the month, with five of eight capital cities recording record highs.
Melbourne was the most recent city to stage a nominal recovery, with housing values exceeding the September 2017 peak last month.
It joined Brisbane, Canberra, Hobart and Adelaide where housing values were also tracking at record highs.
Sydney housing values remained 3.7 per cent below their 2017 peak, but could exceed this by the end of May.
Mr Lawless said at the current rate of growth, the national index was likely to reach a new nominal high over the next two months.
“The primary factors driving this rebound remain in place and include an extremely low cost of debt and improved borrowing capacity,” he said.
“However, considering the sluggish pace of household income growth, housing affordability is eroding rapidly which is likely to see some parts of the market become less active.”
These pressures were less likely in Perth where housing was very affordable relative to Sydney and Melbourne, jobs growth was trending higher and unemployment was reducing.
Mr Lawless said it could be one of the markets to watch for a stronger performance later this year.
One concern for the national property market was the coronavirus.
“A more significant downturn in consumer sentiment related to the coronavirus outbreak could become a determining factor that impacts the market over coming months,” Mr Lawless said.
“While housing demand is now relatively insulated from a downturn in foreign buyers, the economic impact on key export sectors such as education, tourism and commodities is likely to result in weaker economic conditions and lower consumer sentiment.
“A further deterioration in sentiment could see housing market activity start to slow.”
