The premium market has been the weakest performed in Sydney, Melbourne and Perth while the more affordable price segments have been much more resilient to falls in values. The opposite can be said for Brisbane and Adelaide, where it is the more affordable suburbs that are underperforming compared with stronger market conditions across the higher priced market segments.
The divergence in results could be due to a number of factors, however, it is most likely because the premium housing market is comparatively much more affordable in Brisbane and Adelaide than in the other cities. On the other hand, the most affordable suburbs in Brisbane and Adelaide have probably attracted a greater volume of sales in recent years and there has been a greater prevalence of mortgage hardship in these areas, which are dominated by recent first home buyers resulting in some forced sales, which in turn impact on the value of other homes in these areas.
Across the major capital cities, Melbourne’s premium housing market has been the weakest performer over the year with values falling by 7.9% closely followed by the middle market in Melbourne (6.9%) and the most affordable suburbs in Adelaide (6.7%). Sydney’s most affordable suburbs have enjoyed the strongest growth performance over the past year (0.9%) followed by Perth’s most affordable suburbs (0.6%) and the Sydney middle market (0.5%).
In terms of the decline in values from their respective peaks to March 2012, the middle market in Sydney is the only one that is recording values at an historic high. Significant falls from the market peak have been recorded across the premium market in Perth (14.1%), the premium market in Adelaide (10.7%) and the affordable market in Brisbane (10.3%). On the other hand, declines in values from the market peak have been relatively minor in affordable Sydney suburbs (0.6%), affordable suburbs in Perth (4.0%) and affordable Melbourne suburbs (5.5%).
Overall, the results serve as a reminder that housing markets are diverse. Headline figures are great for providing an overall view of market conditions but it is often the case that sub-markets behave differently. This is true not only from a price point perspective but also geographically. For prospective buyers and sellers, it pays to understand both the macro market conditions as well as the micro market conditions to ensure your purchase and selling decisions are completely informed.
This article first appeared on RP Data.
Andrew Sadauskas is a former journalist at SmartCompany and a former editor of TechCompany.
