The latest CoreLogic Home Value Index, released September 1, recorded a 1.1% rise in dwelling values in August, with the majority of capital cities registering positive movement over the month.

Dwelling values in both Sydney and Melbourne continued to increase, with the cumulative growth from June 2012 to date now reaching 64% in Sydney and 44% in Melbourne. This was followed by Brisbane at a far 18%, while Perth and Darwin remained the only capital cities to record a fall in dwelling values.

“Despite a strong month-on-month reading, the pace of annual capital gains has trended lower compared with the 2015 peak in growth conditions, when capital city dwelling values were rising at 11.1% per annum,” said CoreLogic head of research Tim Lawless.

“While the annual growth trend is now lower than it was one year ago, the rate of capital gains remains well above other benchmark measures such as inflation, income growth and rents, which is pushing already stretched affordability ratios to new record highs.”

Lawless also pointed out that strong auction clearance rates have been supporting the strong growth conditions in Sydney and Melbourne. The low listing numbers are also contributing to the upward pressure on dwelling values.

As for the rental market, capital city rents fell a further -1.1% over the past three months, with the weakest rental conditions also being experienced in Darwin and Perth.

“In summary, Australia’s housing market continues to demonstrate a strong level of resiliency in this record low interest rate environment, despite the many moving parts and somewhat divergent underlying trends,” concluded Lawless.