Which two capital cities’ property prices may have just reached their peak?

Right now, there are three speeds in the housing market across the country, with two capital cities giving indicators that prices may have peaked, three cities looking like they may shortly peak, and three cities still going strong. What's the state of the market in your corner of the woods?

According to the latest CoreLogic numbers, while national property prices have risen by a remarkable 20.6 percent in the last year, value growth in every major city and broad ‘rest-of-state’ region has slowed.

Some locations, though, are doing better than others, as we’ll show you below.

Sydney and Melbourne may have peaked.

Sydney and Melbourne had the steepest slowdown in February, with Sydney’s house values falling for the first time in 17 months (since September 2020), while Melbourne’s housing values remained steady for the month (0.0 percent).

That’s a significant dip from January’s 0.6 percent rise in Sydney and 0.2 percent in Melbourne.

The fact that there is now more property stock for purchasers to choose from is a big contributor to the slowdown.

Advertised stock levels in Melbourne are currently above average, tracking 5.5 percent higher than a year ago, while advertised stock in Sydney is 6.3 percent higher than a year ago.

Tim Lawless, head of research at CoreLogic, adds that more choice means buyers have less urgency and have more bargaining power.

Mr Lawless continues, “The places where house values are rising at a faster rate continue to demonstrate an obvious dearth of suitable properties to purchase.”

Perth, Canberra, and Darwin may be nearing their peaks.

Perth (0.3 percent), Canberra (0.4 percent), and Darwin (0.4 percent) were the three capital cities that exhibited symptoms of slowing but not yet peaking in February (0.4 percent ).

To put those data in context, housing growth in January was higher in Perth (0.6 percent), Canberra (1.7 percent), and Darwin (0.5 percent).

Perth (8.3%), Canberra (23.8%), and Darwin (12.3%) have all outperformed the national average during the last 12 months.

Regional locations, Brisbane, Adelaide, and Hobart are still doing strong.

In Brisbane (1.8 %), Adelaide (1.5 %), and Hobart (1.5 %), conditions are easing less noticeably (1.2 %).

Similarly, regional markets have remained relatively unaffected by slowing growth, with five of the six rest-of-state regions continuing to post monthly increases of more than 1.2 %.

The stronger home market conditions in Brisbane and Adelaide can be observed in the quarterly growth numbers, with Brisbane property values increasing by 7.2 % and Adelaide housing values increasing by 6.4 percent over the same time.

While the markets in Brisbane and Adelaide have slowed a little, a scarcity of listings in those cities is helping to keep prices high.

Mr Lawless continues, “Total listings across Brisbane and Adelaide remain more than 20% lower than a year ago and more than 40% lower than the previous five-year average.”

“Similarly, advertising supply in the combined rest-of-state markets remains low, 24.9 percent lower than last year and nearly 45 % lower than the five-year average.”

Do you require assistance in financing your house purchase in 2022?

With property prices dropping across the country, now is a good moment to assess your financial situation and determine what you can and cannot afford in the coming year, whether you’re purchasing your first house or adding to your investment portfolio.

And part of the process is determining your borrowing capacity before you start looking for a home, so you don’t go beyond.

So, if you’d want to find out how much you may borrow – and thus buy – get in touch with us right now.

We’d love to sit down with you and help you lay out a strategy for achieving your financial and real estate goals in 2022.

To learn more, contact Premium Finance Group Australia at (07) 4720 8888 or email us at finance@pfga.com.au

Disclaimer: The content of this article is general and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your situation and may not be relevant to circumstances. Before taking any action, consider your particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced, or republished without prior written consent.

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