Home value growth rates in smaller cities may soon start to rival Sydney's, a new report has found.
Sydney was the only capital city to have seen a decline (of 0.2 per cent) in dwelling values over the past three months, according to February’s CoreLogic RP Data Hedonic Home Value Index.
During this period, the capital cities that saw the greatest increase in dwelling values were Hobart (8.5 per cent), Melbourne (3.8 per cent) and Brisbane (2.0 per cent).
“Even though home values have trended lower over the year in Perth and Darwin, they have recorded value rises of 0.2 per cent and 0.3 per cent respectively over the past three months,” CoreLogic RP Data research director Tim Lawless said.
“The trend in home value growth is showing signs of increasing in those markets that have previously underperformed. These include Brisbane, Adelaide, Hobart and Canberra.”
“Affordability constraints aren’t as apparent in these cities and rental yields haven’t been compressed to the same extent as what they have in Melbourne or Sydney.”
Mr Lawless said a 5.5 per cent increase in Brisbane’s home values over the past year is “the fastest annual rate of value growth in a year”.
Hobart has also seen great results, with a 6.2 per cent increase in home values over the year – “the fastest annual rate of home value growth since July 2010”.
According to the report, Sydney’s annual rate of growth has slowed, almost halving from its cyclical peak of 18.4 per cent in July last year to 9.5 per cent growth over the past 12 months.
[Related: Slowdown forecast for house price growth]