Home values in Melbourne are growing at a faster pace than in Sydney on the back of strong interstate migration and comparative affordability, according to property researcher CoreLogic.
Home values in Melbourne surged 1.4 per cent over the past week, faster than a 0.7 per cent rise in Sydney, according to weekly CoreLogic data.
Melbourne home values rose 5 per cent over the past month and 16.8 per cent over the past 12 months, outstripping Sydney’s gains of 3.1 per cent and 13.6 per cent respectively.
But the median house price in Melbourne was much lower, at $710,000, compared to $950,000 in Sydney.
“Interstate migration in Victoria is continuing to go from strength to strength, while in NSW it’s starting to fade,” CoreLogic head of research Cameron Kusher told The Australian.
Both states still have strong economies and good job prospects, he said.
“But people are still choosing Melbourne because they think they still have a chance in the housing market, whereas they probably don’t feel like they have that chance in Sydney any more.”
The Sydney market had generally been stronger, but Melbourne had started to overtake the harbour city over the last one to two months, he said.
Banks have been clamping down on investor lending in response to regulatory pressure. As investors are more active in NSW than Victoria, discouraging investment lending would have more of an impact in Sydney than Melbourne, Mr Kusher said.
CoreLogic said last week that across Australia’s capital cities, dwelling values had fallen only twice in the past 20 financial years.