According to CoreLogic’s monthly hedonic home value index, Australian housing values rose 1.5% in October, following similar trends to previous months. Nationally, the monthly growth rate eased to 1.49% from 1.51% in the previous month.
Although nationally, the headline growth reading remains virtually unchanged over the months, across the broad regions of Australia, market conditions are starting to show diversity. Perth recorded its first negative monthly result since June last year, while Brisbane has taken over as the fastest-growing market with housing values up 2.5% in October - the highest rate in 18 years.
Across Sydney and Melbourne, the monthly growth rate has more than halved since the highs seen in March 2021, when they reached a monthly growth rate of 3.7% and 2.4%, respectively.
Tim Lawless, Research Director of CoreLogic, says that slowing growth conditions are a factor of housing affordability, rising supply levels and less stimulus. “Housing prices continue to outpace wages by a ratio of about 12:1. This is one of the reasons many first home buyers are becoming a progressively smaller component of housing demand,” he says.
“New listings have surged by 47% since the recent low in September and house-focused stimulus such as HomeBuilder and stamp duty concessions have now expired. Combining these factors with the subtle tightening of credit assessments set for November 1, and it’s highly likely the housing market will continue to gradually lose momentum.”
“As housing becomes less affordable, we expect to see more demand deflected towards the higher density sectors of the market, especially in Sydney where the gap between the median house and unit value is now close to $500,000.”
“With investors becoming a larger component of new housing finance, we may see more demand flowing into medium to high-density properties. Investor demand across the unit sector could be bolstered as overseas borders open, which is likely to have a positive impact on rental demand, especially across inner-city unit precincts.”
ABS data shows that the past five years has seen a boom in apartment approvals and construction - significantly outpacing traditional detached houses. The data suggests that buyers are drawn by the affordability of apartments and townhomes (compared to houses) alongside the quality and lifestyle upgrades on offer.
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