Home values drop for first time in almost two years
MELBOURNE home values fell for the first time in almost two years in December, new data shows.
Dwelling values in the city dropped 0.2 per cent to $720,417 in the final month of 2017, marking the first slip in the monthly figure since February 2016, according to CoreLogic's latest Hedonic Home Value Index.
CoreLogic head of research Tim Lawless said Melbourne had been "far more resilient to negative growth" compared to Sydney due to factors including "stronger population growth, lower affordability hurdles and a higher rate of jobs growth".
"However, the growth trend has been clearly moderating since late 2016 and Melbourne's annual rate of capital gain, at 8.6 per cent, has fallen below double digits for the first time in eleven months," he said.
National dwelling values fell 0.3 per cent in December, setting the scene for softer housing conditions in 2018, according to Mr Lawless.
The national median of $548,817 was 4.2 per cent higher than a year earlier.
"In 2017 we saw growth rates and transactional activity gradually lose steam, with national month-on-month capital gains slowing to 0 per cent in October and November before turning negative in December," Mr Lawless said.
Sydney and Darwin values fell by the largest amount across Australia in December at 0.9 per cent, with Sydney's median value at $895,342 and Darwin's $424,901.
Hobart was the strongest performing city, with 1.5 per cent growth across the month, and 17.8 per cent annually, to $403,800.
The month prior, in November, Melbourne had been the only mainland capital to see growth in the property market at 0.5 per cent.
Melbourne values grew 0.9 per cent in the final quarter of the year.
WBP Group executive chairman Greville Pabst said growth would continue in the city in 2018, but at a slower rate.
"Our clearance rate will perhaps be in the mid to high 60s and I think if that is the case there will be another year of growth in 2018, but it's probably going to be in that range of single digits, 6-9 per cent, so another reasonably good year," he said.
Advantage Property Consulting director Frank Valentic also expected "another solid year" but said the high rate of growth of recent times could not be sustained.
"There's no talk of interest rates going up (in 2018), they're talking about 2019 and that will be the real handbrake on the market," he said.