Units in Capital Cities Decreasing Further than Regional Areas

CoreLogic’s national unit index has dropped by -2.3% from spiking in April, with unit values falling by almost $14,400 during the previous four months. Since April, the combined capital cities (making up 78.3% of Australia’s unit supply) had a greater reduction in unit values than regional areas. Metropolitan units decreased by -2.7%.

Regional units have been somewhat more resilient, with prices declining -1.3% since spiking in June. With Australia’s cash rate increasing by 2.25% in five months, housing values have fallen. While unit values tend to be more durable than the housing market, they aren’t completely safe from the effects of rising interest rates. As a result, the annual performance gap between houses and units has grown closer.

Looking back at capital cities, Hobart and Sydney have seen the largest declines in unit values per month, dropping -1.7% and -1.5% each; meaning Hobart’s unit values are now lower than they were at the start of this year. Whereas regional WA has recorded a small 0.2% rise in unit values over September.

Unit listings are strongly affecting values in the current market. As supply has been limited in Adelaide, slight value growth has been reported. Whereas Sydney and Melbourne have a larger supply of unit listings, which tilts the stage in favour of buyers rather than sellers.