Apartments in Melbourne are showing healthy monthly and quarterly price gains as the Victorian capital drives a slow but steady recovery across the national housing market.
Melbourne units posted a value gain of 0.4% in July, according to the latest figures from CoreLogic, with Sydney close behind on 0.3%. And positive growth for house prices in both major markets meant a monthly gain of 0.1% across the combined capitals.
CoreLogic head of research, Tim Lawless, said that "despite an unprecedented amount of new apartment stock entering the market, Sydney and Melbourne unit values have consistently outperformed the detached housing sector through the downturn, and this trend is continuing into the recovery phase”.
Lawless also noted that "the stabilisation in housing values is becoming more broadly based, with five of the eight capital cities recording a subtle rise in values over the month, while the regional areas of South Australia, Tasmania and Northern Territory also recorded a lift in housing values in July".
CommBank Senior Economist, Belinda Allen, attributed the improved housing conditions to "lower mortgage rates due to cuts in the RBA cash rate, extra borrowing capacity from APRA-induced changes to loan serviceability and no taxation changes due to the re‑election of the Coalition government".
Hobart and Canberra remain the strongest performers, with both the only capitals to post positive dwelling price growth (of 2.8% and 1.1% respectively) over the 12 months to 31 July.
Perth's ongoing weak performance means it's now the most affordable capital in which to buy a house, with its median house price of $459,227 just below Adelaide's. Similar weakness in Darwin has brought the median apartment price there down to $289,369, around 10% lower than the next-most affordable capital for units, Adelaide.
Looking ahead, Allen predicted the RBA "to cut rates a third time to support the economy and lower the unemployment rate.
"We expect the next rate cut in November," she said.