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Category: Housing Industry / Economic Trends

House prices tick higher but unit values fall

Thursday, 1 Dec 2016 07:00:00 | Michael Janda

The Nishi apartment complex being built at Acton in Canberra's inner-north, January 11, 2011. (ABC News)

Capital city home prices continued to rise in November, but the increase was driven by detached houses with apartment values falling, according to a key private index.

CoreLogic data show that November's 0.2 per cent gain in home values across Australia's capital cities was driven by a 0.2 per cent rise in house prices, while unit values fell 0.1 per cent.

The monthly decline in unit prices was driven almost entirely by Melbourne, where values dropped 3.2 per cent over the month.

Melbourne units have only risen 3.9 per cent in price over the past year, versus a 12.2 per cent gain in detached house prices.

House prices have outperformed unit prices in every capital except Perth, Hobart and Darwin over the past year.

CoreLogic's head of research Tim Lawless said the relative weakness of units comes down to a surge in supply, which demand is not keeping up with.

"We are already seeing quite a divergence in the growth rates in the marketplaces where unit supply is looking problematic," he told the ABC.

"Brisbane's a very similar story, where house values are up by 4.3 per cent and unit values are down by nearly 1 per cent over the past 12 months, and they're the two markets where we are seeing the largest uplift in approved unit supply."

Mr Lawless said, while there is the possibility of some substitution between houses and units if apartment prices continue to lag, for those who are determined to buy a stand-alone house options are limited.

"We aren't seeing a great deal of new detached housing development and greenfield development at the outskirts of the cities, the current building boom is all about high-rise developments," he added.

External Link: Home price index November 2016

AustraliaPlus


 

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