Owning property still remains top of the list for many Aussies. Holding onto your property for some time can increase the value of the property. However, recent research by CoreLogic revealed that the pricier the property the lower the dwelling value. Here is what you need to know.
Dwelling values drop to their lowest since 2009
Dwelling values across the property market have dropped but the largest drop was felt in the expensive quartile of the market. This essentially had an effect on the National dwelling values which fell by –4.8% by the end of 2018, which according to CoreLogic, was the largest annual decline since April 2009. The fall in dwelling values affects the price of how much you end up selling your property for. Depending on which property market that you find yourself in, you could be in a position where you will have to sell for the same price you bought it for or lower.
The higher the price tag the harder the fall in value
The report by CoreLogic found that property under $261,215 where the only segment in the property market that experienced growth in dwelling values. Properties under this segment grew by 0.9% for the quarter and +1.0% by the end of 2018.
However, for properties that carried a hefty price tag found that dwelling values fell even further over the months. The report found that the most expensive properties that were valued at $1,104,592 or more experienced the largest fall in the property market. Falls were recorded at –9.6% for the year and –4.2% for the quarter. Capital cities such as Sydney, Perth, and to a lesser extent, Melbourne were most notably hit due to the high property prices within these areas.
What could potentially push homeowners in these regions to sell their property at a lower price than what they intended is the first-time home buyers that are going to regional areas due to the affordable property prices. Having your property sit on the market for too long can also push many sellers to sell their house at a lower value than what they have listed it.
Housing affordability still making it hard for buyers
The overall national dwelling values have fallen by –4.8% and have been dragged by the higher quartile of the market. One of the main issues that is currently challenging the property market is the housing affordability which hasn’t moved much to allow first-time property buyers to get a foot in the door. CoreLogic found that despite dwelling values trending lower in Sydney and Melbourne, it still remained expensive to crack.
Home buyers will find that by comparing various property markets, prices in Sydney can be double when compared to Adelaide and Hobart. The average cost of owning a house in Sydney is currently at $960,344 which is higher than other places that have been attracting home buyers.