“The winter chills are driving temperatures lower across the country, but the thermometer is not the only thing that has been dropping,” said Kaytlin Ezzy (pictured above), economist at CoreLogic Australia.
CoreLogic’s daily home value index noted a rise of just 0.5% over the four weeks to July 18, a drop from the 0.7% rise seen last month.
Persistently high inflation and anticipated interest rate cuts being pushed back have caused consumer sentiment to drop.
“Consumers are becoming resigned to the fact that interest rates could remain higher for longer,” Ezzy said.
This has led to some potential buyers delaying their purchasing decisions, thus reducing demand.
See LinkedIn post here.
The flow of new listings remains above the previous five-year average, providing buyers with more options and leverage.
Approximately 137,000 properties were advertised for sale nationally over the four weeks to July 14, a figure that is still below the five-year average but showing a rise from March levels, CoreLogic figures showed.
The recent slowdown is more pronounced in expensive sectors, with house growth showing more sensitivity than units.
Sydney dwellings have decelerated more than mid-sized capitals.
“The 28-day change in capital city house values has eased to just 0.4%,” Ezzy said.
Meanwhile, affordability remains a crucial factor, with more affordable markets showing resilience against elevated interest rates.
While Melbourne and Hobart have seen declines, Perth, Adelaide, and Brisbane continued to lead with positive growth.
“Perth continues to lead the pack, with a rolling 28-day increase of 1.8%,” Ezzy said.
Despite this, the trend of softer growth is emerging in these cities too.
Despite the current slowdown, positive capital appreciation continues in most markets, supported by a fundamental supply and demand mismatch. However, the outlook hinges on the upcoming June quarter inflation results.
“All eyes will be on the June quarter inflation outcome,” Ezzy said, indicating potential impacts on future housing growth trends.
Get the hottest and freshest mortgage news delivered right into your inbox. Subscribe now to our FREE daily newsletter.
