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After eight consecutive months of growth, dwelling values across the combined capital cities recorded no change in February, according to the RP Data Rismark Home Value Index.
Only three of eight capitals recorded growth in dwelling values for the month, with Sydney up 0.8 per cent, Hobart 1.4 per cent and Darwin 0.7 per cent.
Speaking to The Adviser, RP Data research analyst Cameron Kusher put the flat result down to “seasonality” in the market, with February traditionally a slow month for house price growth.
“I wouldn’t necessarily take this month’s figures as a guide to what’s happening. You are, through a period of growth, going to see months where values fall and months where values rise.
“There are seasonal effects at play; what will be more interesting will be the trend over the next three or four months,” he said.
Surprisinlgy, Brisbane was the worst performer of all capitals in February with negative two per cent growth. However, this, according to Mr Kusher, is nothing more than a seasonal adjustment with the city still set for a very strong 2014.
Mr Kusher highlighted the Brisbane market's solid fundamentals and relative affordability compared to Sydney and Melbourne as key to driving growth this year. He also noted Brisbane’s more appealing rental yields.
Meanwhile, Hobart continued its recent run of strong growth. The 1.4 per cent increase in February takes growth to 7.9 per cent for the past three months.
However, while dwelling values may strengthen somewhat over the next 12 months, the current rate of growth is unlikely to be sustained, according to Mr Kusher.
“If you look at Tasmania you still have a very high unemployment rate and low economic growth so there are not a lot of drivers in that market.
“With low interest rates and the fact that the market has gone nowhere for such a long period of time, maybe we will see some low levels of capital growth over the next 12 months but I certainly don’t think that 7.9 per cent growth over the last three months is necessarily reflective of the sort of growth we are going to see in Hobart going forward,” he said.
