Insights

For the second consecutive month, dwelling values rose across every capital city and rest-of-state region in the month of November. This recovery pattern follows a 2.1% drop in dwelling values between April and September at the height of the Covid-19 pandemic.

In Melbourne metro, we have seen a 0.7% increase in dwelling value for November, a positive sign that the market is beginning to bounce back. While primarily driven by house prices, Melbourne’s unit market experienced a smaller than expected decline, bucking the national trend.

Regional areas continue to perform strongly, with monthly growth rate double that of metro areas, nationally. Regional Victoria grew 1.3% in November alone, with a 4.5% growth rate for the past 12 months.

Industry experts predict that if these growth rates and trends persist, we are likely to see the National Home Value Index surpass pre-Covid levels in early 2021, although do suggest that it may take a little longer in Melbourne where values remain 5% below their recent peak.

Definitions:

YTD – Year to date (YTD) refers to the period commencing the first day of the current calendar year up to the current date and the percentage (%) change from then until now.

Gross Yield – The “yield” of a property tells you how much of an annual return you are likely to get on your investment. It is calculated by expressing a year’s rental income as a percentage of how much the property is worth.

Total Return – is calculated from property value change as well as the gross rental yield. Typically, houses have a superior value growth performance while units offer superior rent returns. You can’t simply sum the Gross Yield and Annual Return figures together to calculate the Total Return, as the Total Return is based on an annualised Gross Yield, which differs from the Gross Yield shown in this graphic (month-end figure).