Property FY14 wrap – capital cities up 10%

2nd Jul 2014By: Peter Switzer

It’s a financial year wrap – and the home values are in! RP Data has released figures on capital city dwelling values for the financial year. For the combined capital cities, dwelling values finished the financial year in double digits, with 10.1% growth.

The top performing cities

It’s no surprise that Sydney and Melbourne have experienced the highest capital gains. Over the 2013-2014 financial year, gains for Sydney’s extremely ‘in demand dwellings’ totalled 15.4%, while Melbourne’s hit 9.4%.

Change in dwelling values over past twelve months

2.7.14 change in dwelling values over the past 12 months
Over the current growth cycle – which began around the end of May 2012 – Sydney’s dwelling values have been boosted by 23.1% – the most significant gain in any capital city during this period.

Month to month volatility

This month, total capital city dwelling values increased by 1.4%, however that followed a fall of 1.9% last month, and makes for quite inconsistent home value trends. Additionally, there has been a fall in capital city dwelling values by 0.2% over the quarter. Tim Lawless, a researcher at RP Data, suggests seasonal factors may have been contributing to this market volatility.

“The last time we saw a negative quarterly movement in our combined capital city index was May last year. The recent reduction in capital gains is likely a correction from the strong market conditions reported over the first quarter of the year.”

“Looking through the monthly movements, the trend in performance is much more important. It shows that the quarterly rate of growth peaked across the Australian housing market in August last year at 4%. Since that time, the rate of capital gain has generally trended towards a more sustainable level. The slowdown in dwelling value appreciation will be a welcome relief to policy makers and those seeking to buy into the housing market,” Lawless said.

Total returns

RP Data has calculated total return by combining capital gain with gross rental yield. After calculating total return for every capital city, Sydney has displayed the best performance, with a total return of 20.2% over the financial year.