Capital city home values have fallen across each capital city market over the past 12 months. However, when we drill down our analysis across the broad price segments of the market it is clear there are different dynamics at play.
The RP Data-Rismark Stratified Hedonic Index measures how dwelling values have changed across three broad price segments: the most affordable 20% of capital city suburbs (affordable market), the middle 60% of suburbs (middle market) and the top 20% of suburbs (premium market). The index provides further insight into the performance of market subsets rather than just focusing on the overall market performance.
Across the combined capital cities it is generally the most expensive suburbs that have recorded the largest decline in values over the 12 months to March 2012.
Dwelling values across the premium sector have fallen by 5.7% compared to value falls of 3.1% across the middle market and a 2.3% fall in values across the affordable suburbs. As the graph shows, the premium housing markets have shown a stronger performance over the most recent growth phases, but a larger correction when values are declining.
Across the major capital cities you can see that the performance of the different sectors of the housing market have not necessarily followed the national results.
Across the five major capital cities, only the most affordable suburbs and the middle market in Sydney and the most affordable suburbs in Perth have recorded any growth in home values over the past year.