Supply constraints boost mid-sized capitals

CoreLogic’s latest Housing Chart Pack highlighted the disparity in housing inventory relative to historical averages.

Eliza Owen (pictured above), CoreLogic’s head of research Australia, identified supply and demand balance as a key driver of market variations.

“At one end of the spectrum is Perth, with total listings sitting -45% below average stock levels, and a monthly capital growth rate of 1.8%,” Owen said. “At the other end of the spectrum is Hobart, where there are 39.5% more listings than the historic five-year average for this time of year, and home values are 0.5% lower.”

This imbalance suggests that markets like Perth are seeing heightened competition for homes, driving prices up, while Hobart’s market faces downward pressure due to excess inventory.

Influencing factors on supply and demand

The dynamics of the housing market are influenced by various factors.

“On the demand side, lower price points across Perth, Adelaide, and parts of Brisbane continue to drive buyers, even under high interest rates,” Owen said. “Interstate migration remains particularly strong in QLD and WA, and income relative to home values is also more reasonably matched in Perth.”

On the supply side, Owen pointed out that Victoria has experienced an unusual increase in new listings and has completed more dwellings than any other state in the past decade, moderating price growth.

Key highlights from the housing chart pack

The June report from CoreLogic also offers several noteworthy insights:

• The combined value of residential real estate in Australia rose to $10.7 trillion at the end of May.
• Quarterly growth rates have picked up, with values increasing by 1.9% in May, a jump from 1.1% in January.
• Despite the uptick, annual growth rates have moderated from 9.4% in February to 8.3% in May.
• Lower quartile dwelling values saw significant growth, outpacing upper quartile increases, suggesting a market shift towards more affordable housing segments.
• New listings are trending higher than the historic five-year average, particularly in Sydney and Melbourne, but overall listing levels remain subdued due to strong sales absorption.
• The national median time on market was steady at 31 days, though Perth experienced a notable decrease to just 10 days.

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