Regional home values rose by 0.4% during March, offsetting the 0.2% fall across the combined capital cities, according to the CoreLogic Home Value Index. In the March quarter, regional home values rose by 1.1%, with a total increase of 2.6% over the past year.
The regional rise helped to offset the softening of the metropolitan market, which saw the combined capital city values decline by 0.2% in March. Prices in the March quarter decreased by 0.9%. Annual combined capitals growth was 0.8%.
“The softening trend in the Australian housing market is largely due to weaker conditions in Sydney,” said Tim Lawless, CoreLogic head of research. “However, most other capitals are also recording subtle falls.”
Sydney decline stabilises
Sydney dwellings fell 1.7% in the first quarter of 2018, decreasing by 2.1% over the past 12 months, but the decline is slowing, according to the data.
Sydney prices declined by 0.9% in December 2017 and January 2018, by 0.6% in February and now a 0.3% drop in March.
“If the trend towards an improving rate of decline persists, the Sydney housing market may have already moved through its peak rate of decline,” Lawless said.
Units outperform houses in Sydney and Melbourne
In Sydney and Melbourne, units are outperforming houses at market.
In Sydney, unit prices have increased by 1.9% annually compared to the decline in houses of 3.8% over the same period. It’s a similar story in Melbourne, where stronger gains in the unit market of 6.6% compare with softer housing growth of 4.9%.
This might suggest an increase in buyer demand led by lower entry prices and more convenient commuting times, Lawless said in a release.
The median value of a Sydney unit is $756,557 while the median value of a house is $1,033,892. In Melbourne, the median value of a unit is $574,388 while the median value of a house is $828,720.
Houses have performed more strongly than units outside of Sydney and Melbourne.