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August data shows a notable cooling in the housing market, with the pace of housing lending (excluding refinancing) slowing to just 1% month-on-month, a sharp drop from the 3.5% rise recorded in July, ANZ reported.
“The increase was driven by investor lending, which rose 1.4% month-on-month in August and is up 34.2% over the past year,” said Madeline Dunk (pictured above), ANZ economist.
Queensland led the nation in lending growth, with a significant 41% year-on-year increase, particularly in investor lending, which surged by 58.5%. Western Australia followed closely with a 58.1% rise in investor lending over the same period.
Building approvals fell by 6.1% in August, reversing the strong 11% rise in July.
The drop was primarily driven by a 16.5% decrease in private unit approvals. However, private house approvals showed a modest increase, rising 0.5% month-on-month and 5.9% year-to-date. Unit approvals, which have contributed significantly to the market’s weakness, are down 2.2% year-to-date.
Capital city housing prices also showed signs of cooling, growing just 0.5% month-on-month in September.
The average growth rate over Q3 slowed to 0.4%, down from 0.6% in Q2. Perth and Adelaide were the exceptions, both reporting price increases above 1%, while Melbourne, Hobart, and Canberra saw prices decline.
Dunk highlighted the regional variation in housing price trends.
“Outcomes differ across the country. Prices are currently up 18% year-to-date in Perth and over 10% in Adelaide and Brisbane,” she said.
The strongest price growth is expected in Perth, projected to end the year with a 25% rise, while Adelaide and Brisbane are forecast to see increases of around 15%.
Conversely, Melbourne and Hobart are experiencing sluggish price performance, with further declines anticipated. In Melbourne, sales volumes have outpaced new listings, contributing to falling prices.
Looking ahead, housing prices are forecast to rise by 7.3% in 2024, with the pace of growth slowing to 5.5% in 2025. However, regional differences will continue to be a factor, with cities like Perth and Adelaide expected to see stronger growth than Melbourne and Hobart.
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