The Domain Holdings Australia Ltd (ASX: DHG) share price is up more than 4% this morning following the release of new CoreLogic data showing house prices are on the rise.
Domain is the business behind one of Australia’s largest property portals, Domain.com.au, which allows property sellers to try to advertise to as many potential buyers as possible. Some of the other real estate websites it operates include Allhomes.com.au and Commercialrealestate.com.au.
CoreLogic is a research firm that monitors residential and commercial property prices across Australia. The CoreLogic Home Value Index combines recent sales data with information about the attributes of individual properties.
House Prices Are Rising
House prices have been falling since October 2017, although the rate at which they are falling has been slowing over the last few months. In August, national dwelling values finally recorded an increase, up 0.8% over the month.
CoreLogic research director Tim Lawless said the rise is consistent with other data we’ve seen over the last few months.
“The significant lift in values over the month aligns with a consistent increase in auction clearance rates and a deeper pool of buyers at a time when the volume of stock advertised for sale remains low,” he said.
In August, housing values increased in five capital cities, with Melbourne and Sydney prices leading the charge, up 1.4% and 1.6% respectively. Adelaide, Perth and Darwin all saw house prices continue to fall, with Darwin hit the hardest (-1.2%).
The capitals cities combined recorded an increase of 1% while regional areas recorded a small decline of 0.1%.
Over the last three months, national house prices are now up 0.6%, the first positive three-month period since November 2017.
While house prices are rising again, Sydney prices remain 13.3% below their previous peak, and Melbourne prices are still down 9.5%.
The Domain share price has responded positively as more listings will mean further revenue, and REA Group Limited (ASX: REA) shares have also opened higher.
Is The Housing Downturn Over?
While prices remain well below their peak in a lot of the capital cities, price movements have definitely shown a positive trend over the last few months. I’ll be watching closely for the September data, and I think Domain and REA Group could be two companies to watch.
For other proven companies, have a look at the free report below.
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Disclosure: At the time of writing, Max does not own shares in any of the companies mentioned.
