In the past two decades, there were only two years when combined capital city dwelling values fell. Last year, these values rose by 9.6 per cent which was higher than the 8.3 per cent increase recorded in the previous financial year.
Combined capital city dwelling values have risen in the last five financial years but in 2010-2012, there were successive financial years when values dropped. Individual capital city growth in recent years is a different story.
In Sydney, dwelling values rose by 12.2 per cent during the past financial year, its fifth successive financial year in which values increased. This value growth was greater than the 11.3 per cent growth in the previous financial year.
In Melbourne, values have risen for five successive financial years, each of which saw a faster value growth rate. Last year, Melbourne values rose by 13.7 per cent which was the cities highest growth since 2009-2010.
Brisbane, on the other hand, saw a 2.0 per cent growth in values last financial year, which was down from the 5.3 per cent growth recorded in the financial year prior. Brisbane’s values have risen over the last five years but the previous year was its slowest growth since 2012-2013.
Adelaide also experienced a 2.4 per cent increase in values last financial year, which is slightly higher than the previous year’s 2.1 per cent growth. It also marks Adelaide’s fifth consecutive financial year in which values rose.
Meanwhile, Hobart and Canberra dwelling values have both increased over the past three financial years, whereas Perth and Darwin dwelling values have dropped for the same three consecutive financial years.
Factors which have influenced the rebound in capital gains last financial year included changes in investment activity following macroprudential measures from the Australian Prudential Regulation Authority (APRA) and rate cuts during May and August 2016. Investment activity across the housing market may slow further following new macroprudential policies announced in March 2017. The 2017-2018 financial year may come with lower capital gains than 2016-2017 because of higher mortgage rates and affordability constraints.
For more information about property investment in Australia, contact a specialist to discuss your particular circumstances.
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