Melbourne and Sydney Drive Growth Across Capital City Home Values Post 2008 GFC
As the financial crisis hit, capital city housing markets across the board took a hit experiencing a -6.1% decline in home values between March and December of 2008. Interest rate cutes by the Reserve Bank of Australia (RBA) and the introduction of the First Home Owners Grant reduced further decline.
The graph below shows home value growth over the past 7.5 years. It’s clearly evident that in that time, Melbourne and Sydney have been the standout achievers, having increased by some 71.8 per cent and 87.9 per cent respectively.
Total change in capital city dwelling values Dec 2008 to Jun 2016.
Within that time changes to interest rates and First Home Buyer Grants were made which had an effect on growth of home values, but overall, over the long-term, Melbourne and Sydney have always remained the two standout performers.
Cameron Kusher from CoreLogic RP Data suggests data would indicate that “since the financial crisis the capital city housing market could be described as being extremely interest rate sensitive.”
As for Melbourne and Sydney, these cities appear to have responded best to the stimulus of low interest rates, whilst the strength of the economies and greater employment growth “has clearly assisted driving house values higher in these cities.”
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Source: propertyobserver.com.au
