Combined capital city home values have increased by 9.1% over the first 10 months of this year, compared to a slightly higher 9.5% increase over the same period in 2015. Perth and Darwin are the only two cities in which home values are lower over the first 10 months of this year.
Home values across the combined capital cities have increased by 7.5% over the 12 months to October 2016. The annual rate of growth is trending higher and is now rising at its fastest pace since June 2016. Although value growth is accelerating, it remains much lower than its most recent peak of 11.1% in July 2015. Annual growth is also slower than 10.1% at the same time a year ago.
Perth and Darwin are the only capital cities where values have fallen over the past year, down -3.7% and -3.8% respectively. Although values have increased across all other capital cities, the 10.6% increase in Sydney, the 9.1% rise in Melbourne and the 7.9% increase in Canberra are greater than the growth across the capital city benchmark. Across the remaining capital cities values have increased over the year, up 4.1% in Brisbane, 2.5% in Adelaide and 5.0% in Hobart.
The annual growth in unit values has continued to lag behind growth in detached houses. Over the past 12 months, combined capital city house values have increased by 7.7% compared to a 6.3% rise in unit values. Annual growth in house values has outstripped growth for units in all cities except Perth, Hobart and Darwin. In Brisbane, Adelaide and Canberra the annual change in house values is more than two times greater than the change in unit values. In a number of the capital cities, a record level of new unit construction and completions is likely weighing on unit prices, and with substantially more new units in the pipeline we would expect the underperformance relative to houses to continue.
Gross rental yields were steady in October, recorded at 3.1% for combined capital city houses and 4.1% for units. Although there was no change over the month, the surge in values and stalling rental growth has pushed gross rental yields to historic low levels. In all cities except for Hobart where they are unchanged, gross rental yields have fallen over the past 12 months. With value growth continuing to outstrip the rental market, we would expect gross rental yields to soften further over the coming months.
Across the combined capital cities there were 31,264 unique new properties listed for sale over the past 28 days. While new listings have continued to trend higher throughout spring, they are currently -4.1% lower than they were 12 months ago. New listings are lower than they were a year ago in: Sydney (-16.5%), Melbourne (-4.6%), Adelaide (-1.0%), Hobart (-12.8%) and Darwin (-15.5%). New listings are currently higher than they were a year ago in Brisbane (+8.2%), Perth (+11.8%) and Canberra (+0.3%). In Perth in particular this is a concern given that values are falling and we are seeing more new stock on the market. In terms of unique total listings, there were 109,814 listings over the past 28 days across the combined capital cities which was 2% higher than a year ago. Total listings were lower over the year in Sydney (-9.6%), Melbourne (-0.8%), Hobart (-31.7%) and Canberra (-15.0%) and they were higher in Brisbane (+10.0%), Adelaide (+3.4%), Perth (+18.5%) and Darwin (+2.8%).
Homes were selling the quickest they have in almost a year in September. Over the month, the typical capital city home was taking 39 days to sell compared to 36 days at the same time a year ago. Compared to September 2015, homes were selling quicker in Melbourne, Hobart, Darwin and Canberra and they were taking longer to sell elsewhere. Across homes that are being discounted from their initial listing price, the level of discounting is lower than it was a year ago, In September 2015, the typical discount was recorded at 6.0% compared to a typical discount of 5.7% in September of this year. Discounting levels are higher over the year in Adelaide, Perth and Hobart but are lower elsewhere.
Auction clearance rates have strengthened over recent weeks however, the volume of properties going to auction is well down on the same time last year. In Melbourne, auction clearance rates have consistently been above 70% since early July while in Sydney clearance rates have been consistently above 75% since late July. The latest final clearance rates for both Melbourne and Sydney were above 80% whereas a year ago clearance rates were recorded at 69.7% and 61.2% respectively. A major contributor to the strengthening clearance rates has been fewer auctions. So far this year, Melbourne auction volumes are -11.1% lower than a year ago while in Sydney auction volumes are -25.7% lower. Fewer auctions being held results in less choice and more competition, subsequently it also appears to be resulting in much higher auction clearance rates.