National dwelling values rose 1.2% across the month of October, with the strongest growth centered in Sydney and Melbourne. However, home values trended higher across most capital cities as lower mortgage rates and improved credit availability spurred on buyer demand.

Dwelling values were up across every capital city apart from Perth over the month, and based on the rolling three-month change, the only capitals where values fell were Perth (-1.7%) and Darwin (-1.2%).

However, values remain 5.7% below their peak, highlighting that despite recent gains, home values are similar to what they were there years ago.

Monthly change in capital city home values

The recovery trend in Melbourne overtook Sydney in October, with dwelling values surging 2.3% higher over the month; the largest month-on-month gain since November 2009. Melbourne housing values have recovered 6.0% since moving through a trough in May 2019, while Sydney values are up 5.3% since the recent May low.

                                                                  MONTHLY                               ANNUAL

Sydney                                                      up 1.7 %                                  down 2.5%

Melbourne                                                 up 2.3%                                   down 1.0%

Brisbane                                                    up 0.8%                                   down 1.3%

Adelaide                                                    up 0.4%                                   down 0.9%

Perth                                                         down 0.4%                               down 8.7%

Hobart                                                       up 0.9%                                    up 2.6%

Darwin                                                       up 0.3%                                    down 9.2%

Canberra                                                   up 0.6%                                    up 2.0%

National                                                     up 1.2%                                    down 2.3%

Mixed performance in smaller capitals

The smaller capitals have delivered a mixed performance, although the general theme is one of improving conditions. The rolling three- month change in Brisbane housing values (+1.1%) was the highest since December 2015, Adelaide (+0.1%) posted the strongest rolling quarter since December 2018, while Hobart (+1.0%) and Canberra (+2.4%) recorded the largest three month rise in values since March 2019 and May 2017.

Perth & Darwin declines are slowing

The downwards trend in Perth and Darwin home values has continued, however both markets are showing an improvement in the trend rate of decline. The rolling three-month trend in Perth housing values recorded the smallest decline in fourteen months (- 1.7%) and Darwin dwelling values posted a rare monthly rise in October. Both cities have seen dwelling values consistently trending lower since mid-2014, with Darwin down a cumulative 31% and Perth values 22% lower. First Home Buyer activity is strongest in the NT and WA.

Premium property drives price increases, but…

Over the three months ending October 2019, the fastest appreciation in capital city home values has been across the top quartile of Melbourne and Sydney where values were 7.1% and 5.9% higher, but values are also lifting in the more affordable ranges.

The next best performing sectors were in Sydney and Melbourne, with the broad ‘middle’ of the market recording a 4.6% rise in Sydney and 4.5% rise in Melbourne. The lower quartile of Sydney and Melbourne dwelling values were the sectors that recorded the third largest rise over the past three months, up 3.2% across Sydney’s lower quartile and 3.8% higher across Melbourne’s lower quartile