Market Overview:
In August, Australian home values rose by 0.5%, marking the 19th consecutive month of growth. However, the pace of growth has slowed, with a quarterly increase of 1.3%, down from 2.7% in the same period of 2023. Demand for housing still outstrips supply, but the market is becoming more balanced, with regional supply levels varying significantly.
Capital City Performance:
- Perth: Leading growth with a 2.0% monthly increase.
- Adelaide: Up by 1.4%.
- Brisbane: Increased by 1.1%.
- Sydney: Mild growth of 0.3%.
- Declines: Canberra (-0.4%), Melbourne and Darwin (-0.2%), Hobart (-0.1%).
Key Trends:
- Affordability Constraints: A key factor slowing growth, alongside seasonal factors. The seasonally adjusted Home Value Index increased by 1.7% in the three months to August, down from 3.3% in the same period in 2023.
- Affordability Pressures: Stretched affordability in mid-sized capitals like Perth, Adelaide, and Brisbane may challenge continued growth, with factors like high-interest rates, a softening labour market, and cost-of-living pressures impacting demand.
- Cheaper Market Outperformance: More affordable segments, especially the lower quartile (most affordable 25% of dwellings), saw a 2.7% increase in the past three months, compared to a 0.3% rise in the upper quartile.
Regional Highlights:
Significant growth in more affordable areas, such as:
- Canterbury in Sydney: Up 13.3% over the past year.
- Kwinana in Perth: Up 31.4%.
- Springwood–Kingston in Brisbane: Up 25.5%.
Median Dwelling Values:
- Melbourne’s median value has fallen to $776,044, overtaken by:
- Adelaide: $790,800 (up $13,600 in August).
- Perth: $785,250 (up $15,300 in August).
This is the first time Perth’s median dwelling value has surpassed Melbourne’s since 2015, and the first time Adelaide’s has ever done so in CoreLogic’s forty-year series.
Conclusion:
The Australian housing market is cooling due to affordability constraints, with growth slowing across most capital cities. Lower-priced markets continue to outperform, suggesting demand is shifting toward more affordable properties.
Source: CoreLogic 1 September 2024
