The 2017 financial year was the year of the ‘smashed avo,’ with housing affordability and property investment Sydney particularly being a hot and often contentious topic. It was a busy market with both first home buyers and investors quick to jump in, but at the same time, there was APRA trying to slow the booming property prices particularly in Sydney and Melbourne. We also saw the banks introduce an out-of-cycle interest rate rise targeting property investment. So, now that we’ve begun the new financial year, how did our cities actually perform over the last year, and does the story change between each capital city?
According to research from CoreLogic, over the last financial year, combined capital city dwelling values increased by 9.6%, which was greater than the 8.3% rise over the 2016 financial year. Combined capital city dwelling values have now increased over five successive financial years.
At a city-level, Sydney, Melbourne, Brisbane, Adelaide and Hobart have seen an increase in dwelling values. In Perth, while dwelling values have fallen over the last three financial years, in the last financial year, the rate of decline has slowed significantly. And in the last quarter of the FY 2017, Perth’s dwelling values showed an increase, along with Sydney, Melbourne and Brisbane – according to the CoreLogic Home Value Index.
“The latest figures from CoreLogic are in line with our expectations – clearly Sydney has become unaffordable for many people. At Ironfish, we take a national approach and are able to take our investors to quality properties in areas with strong potential for long term growth across all the major capital cities,” said Ironfish Managing Director, Perth, Helen Qin.
“And whilst these figures are interesting, it’s important to keep sight of the bigger picture, and look beyond the short-term volatility of the market and focus on long-term growth potential. For investors with a buy and hold strategy, the key is to hold properties for the long term,” she added.
As many would expect, Sydney property values increased this past financial year. Dwelling values increased by 12.2% in FY 2017 and it was the fifth successive year in which values rose. Value growth was slightly higher than the 11.3% over the previous financial year.
Values have now increased for five successive financial years with each of those years progressively seeing a faster rate of value growth. Over the past year, values increased by 13.7% which was their greatest increase over a financial year since 2009-10.
Brisbane saw a 2% increase in values over the past financial year. Brisbane values have increased over each of the past five years, though last year had a slower growth rate.
Adelaide saw the fifth consecutive financial year where values increased. The 2.4% rise in FY 2017 surpassed the 2.1% increase the previous year.
In Perth, the rate of decline has slowed significantly, from -4.7% in FY 2016 to -1.3% in the last financial year.
The 6.8% increase in dwelling values over the past financial year was the greatest increase in values over a financial year since they rose by 8.5% in 2005-06.
Dwelling values have fallen for three successive financial years. The -7.0% fall in values over the year was the largest annual decline since values fell by -12.6% over the 2010-11 financial year.
Values rose by 9.6% over the last financial year which was the greatest rise in values over a financial year since 2009-10 when values increased by 13.3%.
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