After recording the largest losses during the recent housing market downturn, the premium end of Sydney and Melbourne’s housing market is driving the rebound in capital gains.
According to a Core Logic report, the performance of the housing market can vary dramatically from region to region, but also across the different product types and value ranges.
In Sydney and Melbourne its clearly the prestige end of the market that is driving the strongest capital gains.
This was also the sector that recorded the largest decline during the down phase.
Brisbane is showing stronger growth conditions across the middle to lower valued properties.
During the downturn the middle to lower priced segments of the market were also more resilient to falls than the top end.
Similarly, Adelaide is showing better resilience to falling values across the more affordable end of the market.
The opposite is true in Perth were the high end of the market has been a little more resilient to falling values.
Hobart has been one of the strongest markets over the past few years, however with affordability constraints becoming more pressing.
Darwin’s housing market has been doing it tough since 2014 however the September (2019) quarter has seen the lower and middle markets actually record a subtle increase in housing values while the upper level continues to record heavy loss.
Canberra’s upper quartile housing is the only broad housing segment across the capital cities where values were at a record high at the end of the September quarter.
Values are rising across all three of the broad market segments, however it’s the top end where growth is strongest.
The different performances of the housing market across broad valuation groups highlights how diverse conditions can be below the surface.
Factors such as housing affordability, lending policies, market cycles and local economic and demographic conditions can have a significant baring on market activity.
This article was first published in The Fence magazine.