What’s happening to house values?

CoreLogic’s latest figures show property values continued to rise in the quarter to June, albeit at a slower pace. 

The CoreLogic Home Value Index rebounded from the 1.1 per cent fall in May, with a 1.8 per cent rise in capital city property values in June. However, for the June quarter, values across the capital cities only increased by 0.8 per cent which is the slowest quarterly growth rate we've seen since December 2015.

Considering there have been a number of drivers introduced to tackle the issue of housing affordability, it’s not out of the ordinary to see a slowing of house price growth. CoreLogic noted that the introduction of factors such as tightening government regulation on mortgage lending is beginning to take shape.

The pressure for banks to curb activity across investment lending has existed for some time, and has an obvious flow-on to housing markets. Australian Bureau of Statistics data shows that 55 per cent of new mortgage demand across NSW alone comes from investors, so as investor activity slows in response to new lending rules, property markets are impacted.

Despite the slowdown in house price growth, CoreLogic data shows mortgage demand remains strong which suggests there are still plenty of active buyers in the marketplace. And whilst there is an expectation that we’ll continue to see a slower rate of growth in housing markets this year we aren’t expecting values to go backwards.