Australia’s residential real estate has reached a new high of $10.6 trillion, marking a significant milestone in the country’s housing market. The latest CoreLogic Housing Chart Pack for May 2024 reveals that while national home values have remained steady, certain segments of the market are showing distinct growth patterns.
The national home values saw a consistent monthly change of 0.6% for the third consecutive month, leading to a 1.8% increase in the three months to April. The annual growth trend, however, has seen a slight easing. After a 9.2% gain over the 12 months to February, the annual growth rate dropped 50 basis points to an 8.7% rise over the year to April.
CoreLogic Economist Kaytlin Ezzy (pictured above) noted that the data indicates a shift in buyer demand towards more affordable housing options. While house values have surged nearly 40% since March 2020, unit values rose only 17.9%, leading to a widening gap between the two.
“Demand is now tilting towards unit and apartment living due to affordability concerns, particularly in capital cities. Hobart is the only capital that saw stronger value growth in houses (0.8%) compared to units (0.6%) over the three months to April,” she said.
Ezzy also highlighted that affordability concerns are driving this shift towards units. The recent “higher for longer” mantra around interest rates is contributing to this trend, with buyers seeking more affordable options in the market.
Perth led the capital cities in capital growth, with values up 6.0% in the three months to April and up 21.1% over the past year. Sydney dwelling values rose by 1.1% over the quarter, while Melbourne saw no change. Brisbane and Adelaide both recorded positive growth, with Brisbane up 3.1% and Adelaide up 3.3%.
Hobart saw a modest increase in house values (0.8%), but a smaller rise in unit values (0.6%) over the three months to April. Darwin and Canberra recorded growth in dwelling values, with both states up 1.0% over the quarter.
New listings trends have seen a slight uptick, with the four-week count of new listings coming in 18.3% above this time last year and 13.7% higher than the previous five-year average. Despite this, overall listing levels remain subdued, with total listings -3.9% below last year and -18.2% below the five-year average.
CoreLogic estimates that 38,317 homes were sold in April, bringing the rolling annual count to 505,153. This represents a 7.3% increase compared to last year, with capital city sales volumes up 9.2% and combined regional sales up 3.9%.
The RBA held the cash rate steady in May, but the outlook is uncertain, according to the report. The value of home lending rose by 3.1% through March, led by a 4.4% lift in first-home buyer financing and a 3.8% rise in investor finance. With $27.6 billion in new housing finance committed, March was the strongest monthly figure since August 2022. The portion of new lending for investment housing has now exceeded the decade average (34.0%) for 10 consecutive months.
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