In February, the Australian housing market experienced a broad-based rise, with CoreLogic’s national Home Value Index (HVI) climbing by 0.6%.
This increase marks the strongest monthly gain since October of the previous year, showcasing a 20-basis-point acceleration from January’s 0.4% rise.
Every capital city and rest-of-state region, except for Hobart (-0.3%), saw an uplift in housing values.
Tim Lawless (pictured above), CoreLogic’s research director, highlighted the market’s resilience despite high interest rates and rising cost of living.
“The ongoing rise in housing values reflects a persistent imbalance between supply and demand which varies in magnitude across our cities and regions,” Lawless said in a media release.
Perth led the charge with a significant 1.8% growth, outpacing other regions.
Adelaide and Brisbane also showed robust growth rates of 1.1% and 0.9%, respectively, with regional areas in South Australia, Western Australia, and Queensland each recording a 1% increase.
“These regions are generally benefiting from a combination of comparatively lower housing prices and positive demographic factors that continue to support housing demand,” Lawless said.
While growth rates in Sydney and Melbourne have stabilised, February saw a positive shift. Melbourne ended a three-month decline with a 0.1% increase, and Sydney’s values turned positive after a slight dip in the preceding months.
Lawless suggested that easing inflation and the anticipation of rate cuts may be boosting housing confidence.
Auction clearance rates and consumer sentiment on the rise
The recovery in housing values coincides with improved auction clearance rates and consumer sentiment. February’s auction results and rising confidence indicated a better alignment between buyer and seller expectations and a stronger capacity for households to commit to significant financial decisions like property purchases.
Despite the positive trends, most regions are still below the peak growth rates of the previous year.
“Last year’s rate hikes clearly dented capital gains, but higher interest rates haven’t been enough to extinguish growth entirely,” Lawless said. “The shortfall of housing supply relative to housing demand is continuing to place upwards pressure on home values across most regions.”
The CoreLogic economist cautioned against expecting a significant rebound in values due to affordability constraints, potential increases in unemployment, a slowdown in household savings, and a cautious lending environment, which are likely to temper growth in the near term.
Get the hottest and freshest mortgage news delivered right into your inbox. Subscribe now to our FREE daily newsletter.
