Growing gap between prestige markets and rest of Australia
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Dec 6, 2019
Growing gap between prestige markets and rest of Australia
A preview of upcoming auctions sees the growing gap between Australia's strongest markets - Sydney and Melbourne - and the rest of the country.
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Luxury List77 First Avenue of Rodd Point is going to auction this weekend through agents Joe Kanaan and Fayez Yammine of Devine Real Estate.
Spurred on by a rise in national dwelling values after a long period of decline, values are now up 4.7 per cent since finding a floor in June through to the end of November.
According to CoreLogic head of research Tim Lawless, the rebound in housing values has been largely driven by Sydney and Melbourne where values have recovered by more than 8 per cent since bottoming out in May; a much faster pace of recovery than anticipated.
"Housing affordability is once again worsening and the value gap between the capital cities is widening as Sydney and Melbourne values appreciate faster relative to the other capitals,” said Mr Lawless.
Looking at capital city median house values over time, the differential between housing values in the two largest capitals compared with other capital cities has widened quite significantly over the past ten years.
Source: CoreLogic
Even when compared to Melbourne, Australia’s second most expensive property market, Sydney’s premium is 24 per cent higher relative to Melbourne’s median house value, with the gap widening since 2009 (11 per cent) as Sydney values increased at a faster pace.
Relative to the remaining capital cities, the value gap has widened even more substantially (2019 vs 2009): Brisbane76 per cent vs. 17 per cent, Adelaide- 104 per cent vs 40 per cent, Hobart 88 per cent vs 58 per cent, Darwin- 107 per cent vs 8 per cent% and Canberra- 39 per cent vs 6 per cent.
With strong growth across Melbourne over recent years, the bridesmade city has consistently been the second most expensive property market for some time now, however this was not the case ten years ago when both Canberra and Darwin had a higher median house value and Perth wasn’t too far behind.
Due to such growth, Melbourne’s gap relative to other capital cities has widen considerably.
Auction preview
The combined capital cities are expected to see a lower volume of auctions take place this week with CoreLogic currently tracking 2,628 auctions, down from 3,206 last week and similar to the 2,631 last year.
There are 1,352 Melbourne homes scheduled for auction this week, lower than last week’s final figures (1,533), however higher than volumes from one year ago (1,283).
Source: CoreLogic
In Sydney, 891 homes are currently scheduled for auction this week, down from 1,221 last week and higher than the same week last year when 870 auctions were held.
Across the smaller auction markets, scheduled volumes are set to be lower week-on-week across all cities except Adelaide where there is one additional auction compared to last week.
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