Smaller Capital Cities Show Resilience

Property prices continue to drop, although Australia’s smaller capital cities are showing some resilience.

Nationally median house prices are down by 1.4% over September, according to Cotality, with both Darwin and Hobart bucking the trend with 0.6% increases.

The unit market is down nationally by 0.8%, although Darwin is up 0.5% and Canberra is up 0.3% over the month.

Cotality research director Tim Lawless says the latest data shows that price growth remains weak, with the national dwelling median down for the seventh consecutive month.

He says the speed of the decline in dwelling values is tracking at the fastest pace experienced over the past forty years.

“The mid -sized capitals, where home values recorded extreme growth conditions over the past six years, are now well and truly in a correction,’ he says.

“However, given the magnitude of the upswing prior to the downturn, most homeowners in these cities are likely to be sitting on a significant equity buffer.”

Transaction levels are dropping and are now 23% lower than at the same time last year.

While the data shows a pattern of broad decline over the longer term, the smaller capital cities such as Adelaide, Hobart and Darwin have maintained higher median house prices than at the same time last year. Median unit prices are also higher in Brisbane, Adelaide, Perth, Darwin and Hobart than at the same time last year.

Lawless says buyers have more stock to choose from at the moment and there is not the same urgency to buy as there was a year ago when values were rising rapidly.