By Eliza Owen, Head of Research at CoreLogic.
National home values increased 0.5% in the month of August, representing the 19th consecutive month of increase in home values and slightly above the downwardly revised 0.3% increase seen through July.
However, the pace of growth is showing clear signs of slowing with the quarterly increase in national home values (1.3%) now less than half the rate of growth in the same three month period of 2023 (2.7%).
At a high level, there is still more demand for housing than available supply, but the flow of advertised supply and demand are becoming increasingly balanced.
Supply levels vary markedly from region to region, with total listings in Melbourne about -25% higher than the previous five-year average, while total listings in Perth and Adelaide are down on the five-year average by more than -40%.
Capital growth across the cities remains diverse. Monthly gains were led by a 2.0% increase in Perth, followed by strong rises of 1.4% in Adelaide and 1.1% in Brisbane. Monthly growth in Sydney was a mild 0.3%. Four capital cities saw a monthly decline in home values, led by a -0.4% dip in Canberra, -0.2% in Melbourne and Darwin, and a mild -0.1% fall in Hobart.
Quarterly growth eased in most capital cities through winter. In Brisbane, there was a more pronounced slowdown in the quarterly growth rate between May (4.1%) and August (2.9%), suggesting an easing in demand across this increasingly less affordable market.
CoreLogic’s Head of Research, Eliza Owen, noted that while seasonality may have contributed to weaker value growth through winter, affordability constraints are a key factor behind the broader slowdown.
“The seasonally adjusted Home Value Index had a stronger result through the three months to August, at 1.7%. But this is still down from the 3.3% lift seen in the winter of 2023,” she said.
Ms Owen noted that the high levels of growth in Perth, Adelaide and Brisbane would be difficult to sustain.
“Housing values cannot keep rising at the same pace in the mid-sized capitals of Perth, Adelaide and Brisbane when affordability is becoming increasingly stretched, particularly in the context of elevated interest rates, loosening labour market conditions and cost of living pressures.”
The ongoing outperformance of ‘cheaper’ markets reiterates a strain on demand. The lower quartile of the combined capital city market, which makes up the most affordable 25% of dwellings, rose 2.7% in the three months to August, compared to a 0.3% lift across the upper quartile.
In a similar demonstration of demand being deflected towards lower price points, the quarterly change in unit values was higher than houses in five of the eight capital cities.
Across the more granular SA3 markets, growth trends have also been highest in relatively affordable pockets like Canterbury in Sydney (up 13.3% in the past year), Kwinana in Perth (up 31.4%), and the Springwood – Kingston market in Brisbane (up 25.5%).
More of the buyer pool may be skewed to the lower-priced segment of the market, supporting values at the more affordable end of the pricing spectrum.
The median dwelling value in Melbourne has been overtaken by Adelaide and Perth, making Melbourne’s median the third lowest among the capital city markets. The Adelaide median is now $790,800 and Perth’s is now $785,250, compared with $776,044 in Melbourne.
In August, Adelaide and Perth saw increases in the median dwelling value of $13,600 and $15,300 respectively, against a -$3,100 fall in the Melbourne median.
“This is the first time that Perth’s median dwelling value has been higher than Melbourne’s since February 2015, when the city was just coming off the highs of an iron-ore boom. It is also the first time in CoreLogic’s forty-year median dwelling value series that Adelaide has had a higher median than Melbourne.”
Continued in the attached media release including graphs, charts and additional commentary and data on:
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