CoreLogic’s national Home Value Index recorded a 0.8% rise in September as the recovery trend moved through an eighth consecutive month of growth.
Article
September 9, 2024
NAB Australian Housing Market Update: September 2024
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.
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 now almost 30% above the previous five-year average, while total listings in Perth and Adelaide are tracking close to 40% below the five-year average for this time of year.
Capital growth across the cities remains diverse but continues to be led by the mid-sized capitals where values are rising at 1 to 2% each month. The monthly pace of gains across Sydney has slowed to 0.3%, while Melbourne, Hobart, Canberra and Darwin recorded a monthly decline in home values.
The quarterly trend rate of growth eased in most capital cities through winter which can be attributed to a combination of seasonality but also worsening affordability constraints, persistently low sentiment and lower borrowing capacity.
While affordability is improving in markets like Melbourne and Hobart, where values are trending lower, it’s hard to see housing values continuing to rise at the same pace in the mid-sized capitals as affordability becomes 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 as buyer demand shifts towards the lower-priced segment of the market, supporting values at the more affordable end of the pricing spectrum.
