Property values rose close to two per cent in June: CoreLogic

Canberra outperformed the other capitals as the only market to see a further increase in the monthly growth rate, with dwelling values 2.3 per cent higher over June, compared with a 1.7 per cent gain in May.

Australia's property growth was led by houses, which rose 15.6 per cent over the year, compared to a 6.8 per cent increase in unit values, according to the most recent report from CoreLogic.

The annual rate of growth is the highest seen across Australia since April 2004, when the early 2000's housing boom was winding down after a period of exceptional growth, CoreLogic researcher Eliza Owen said.

The performance gap has narrowed between regional Australia and the capital cities in recent months, though regional Australia did outperform slightly in June.

Darwin maintained the highest annual rate of growth across the capital cities, increasing 21 per cent in value over the financial year, followed by Hobart at 19.6 per cent.

Across regional Australia, regional NSW had the highest annual growth in dwelling values, followed by regional Tasmania.

Ms Owen said strong demand continued to drive growth.

"Before the recent uncertainty of growing COVID-19 case numbers, there were plenty of demand-side factors driving housing market growth through the first half of 2021," she said.

"In May, the unemployment rate fell to 5.1 per cent, and the underutilisation rate fell to 12.5 per cent, the lowest level since February 2013.

"Consumer confidence remained elevated through June, although down from the recent April highs.

"Elevated savings accumulated through Covid restrictions last year, along with a more confident consumer sector, has encouraged consumption of larger goods, such as housing.

"This has all occurred against a backdrop of continued low mortgage rates, which is one of the most significant demand drivers."

The June report followed an announcement from ACT Chief Minister Andrew Barr this week that he would incentivise the development of properties under $500,000 by cutting stamp duty.

Canberra homeowners would see a spike in their rates bills from next week, with the average household to see a 3.75 per cent increase.

Despite another month of strong gains, CoreLogic reported that there was some signs that some of the heat was coming out of the market.

The monthly change in Australian home values of 1.9 per cent sits well above the decade average, however, this month's growth rate is down three basis points from May 2021, and nine basis points from a recent peak in March 2021.

Across the capital cities, a loss of momentum was most evident across Perth and Darwin. For Perth dwellings, the monthly growth rate in values had averaged 1.4 per cent between January and May 2021, but fell to 0.2 per cent through June.

Across Darwin, the monthly growth rate in dwelling values averaged 2.1 per cent between January and May, but was just 0.8 per cent through June.

Softer growth rates were also emerging at the high end of the market, according to CoreLogic.

Across the top 25 per cent of dwelling values in the combined capital cities market, growth in dwelling values in the June quarter was eight per cent, down from 9.2 per cent in the three months to May.

According to Ms Owen, this easing at the top end of the market was another clear sign of a shift in momentum.

"The rest of the market tends to follow movements at the high end, and this is the first time in nine months that the high-tier growth rate has not accelerated," she said.

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