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Property Market Overview

Residential Property in early 2016

The property market in Australia showed a 0.9% increase over the month of January, according to the CoreLogic RP Data Hedonic Home Value Index.

Over the past twelve months, capital city dwellings values have risen by 7.4%, with Sydney's capital gains of 10.5% no longer the highest annual rate across the capitals. Melbourne's housing market has been more resilient to slowing growth conditions which propelled the annual growth rate to the highest capital city, with dwelling values 11.0% higher over the past twelve months.

The bounce in dwelling values in January may provide an early sign that housing values across the combined capitals cities are not likely to experience material decreases in 2016.

Sydney is the most expensive city with a median dwelling price of $776,000. Hobart is the most affordable city with a median dwelling price of $332,500.

Index results as at 31 January, 2016.

Region Changes in Dwelling Values Rental Yields
Month Quarter Year on Year From Jan 2009 to current Total Gross Returns Median Dwelling Price Houses Units
Sydney 0.5% -2.1% 10.5% 73.4% 14.4% $776,000 3.2% 4.1%
Melbourne 2.5% -0.1% 11.0% 66.4% 14.5% $595,000 2.9% 4.0%
Brisbane -0.7% 0.8% 2.8% 11.6% 7.5% $478,200 4.3% 5.2%
Adelaide 0.0% -0.9% 1.1% 11.2% 5.4% $420,000 4.1% 4.9%
Perth -1.0% 1.7% -4.1% 12.2% -0.2% $515,000 3.8% 4.3%
Hobart 4.7% 3.0% 2.3% 2.6% 7.9% $332,500 5.1% 5.3%
Darwin -0.1% -1.4% -2.5% 20.9% 3.1% $520,000 5.3% 5.1%
Canberra 2.8% 1.2% 6.0% 24.9% 10.5% $587,500 4.0% 5.1%
Combined Capitals 0.9% -0.6% 7.4% 48.1% 11.4% $572,500 3.4% 4.3%

Region

Sydney

Melbourne

Brisbane

Adelaide

Perth

Hobart

Darwin

Canberra

Combined Capitals

Changes in Dwelling Values

Month

0.5%

2.5%

-0.7%

0.0%

-1.0%

4.7%

-0.1%

2.8%

0.9%

Quarter

-2.1%

-0.1%

0.8%

-0.9%

1.7%

3.0%

-1.4%

1.2%

-0.6%

Year on Year

10.5%

11.0%

2.8%

1.1%

-4.1%

2.3%

-2.5%

6.0%

7.4%

From Jan 2009 to current

73.4%

66.4%

11.6%

11.2%

12.2%

2.6%

20.9%

24.9%

48.1%

 

Rental Yields

Total Gross Returns

14.4%

14.5%

7.5%

5.4%

-0.2%

7.9%

3.1%

10.5%

11.4%

Median Dwelling Price

$776,000

$595,000

$478,200

$420,000

$515,000

$332,500

$520,000

$587,500

$572,500

Houses

3.2%

2.9%

4.3%

4.1%

3.8%

5.1%

5.3%

4.0%

3.4%

Units

4.1%

4.0%

5.2%

4.9%

4.3%

5.3%

5.1%

5.1%

4.3%

Source: CoreLogic RP Data Hedonic Home Value Index, 31 January 2016

Rental Returns

Darwin has the highest gross rental yield for houses at 5.3%, while Hobart has the highest gross rental yield for units at 5.3%. Melbourne has the lowest gross rental yield for houses at 2.9% and 4.1% for units. Overall, the rental return for combined capitals in Australia is 3.4% for houses and 4.3% for units.

It is anticipated that the rate of rental growth will continue to slow over the coming months due to increased supply of housing and rental stock and slower migration rates.

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Important Information

1. CoreLogic RP Data Hedonic Home Value Index, January 31, Results, 1 February 2016.

2. Australian Government, Australia to 2050:future challenges, http://archive.treasury.gov.au/igr/igr2010/Overview/pdf/IGR_2010_Overview.pdf

The economic information was prepared from a variety of information sources, based on the information available at the time of publishing. We believe that the information in this report is correct and any opinions, conclusions or recommendations are reasonably held or made at the time of compilation, but no warranties are made as the accuracy, reliability or completeness. Neither Citigroup nor any of its subsidiaries accept liability to any person for loss or damage arising from the use of this information. This information is an indicative guide only. This material contains general advice only and does not take into account your individual objectives, financial situation or needs, and you should consider whether it is appropriate for your particular circumstances. Further information and our dispute resolution process is available at www.citibank.com.au or by phone on 1300 137 931 1300137931.

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