Australian Property Market Continues to Rise, Albeit at a Slower Pace

Australia’s housing market has marked its 19th consecutive month of growth, with home values increasing by 0.5% in August. However, the pace of growth is showing signs of a slowdown, which could be a signal of relief for potential first-time home buyers, according to the latest CoreLogic Home Value Index (HVI).

The median home value across the nation now stands at $802,357, a slight increase from $798,207 in July. The most notable rises were observed in Perth, where home values surged by 2%, followed by Adelaide and Brisbane, which saw increases of 1.4% and 1.1%, respectively. Conversely, the market was less favorable in Sydney, with a modest growth of 0.3%, and it even declined in several other capitals including Canberra, Melbourne, Darwin, and Hobart.

Eliza Owen, CoreLogic’s head of research, expressed concerns about the sustainability of the growth rates in certain cities. “Housing values cannot keep rising at the same pace in the mid-sized capitals of Perth, Adelaide, and Brisbane when affordability is becoming increasingly stretched,” she stated. Owen pointed out several contributing factors to this trend, including elevated interest rates and cost of living pressures.

Despite the deceleration, CoreLogic’s report suggests that national home values are likely to continue to see modest increases through to the end of 2024. The underlying issue, as highlighted in their analysis, remains the lack of new housing supply, a situation worsened by ongoing constraints in the residential construction sector.

The property market’s future movements are likely to be dictated by these ongoing supply issues coupled with broader economic factors. As CoreLogic puts it, “While there is a clear slowdown in growth, housing values are underpinned by a longer-term lack of new supply.”

For potential buyers, especially first-timers, the current market dynamics present a complex landscape. While the slowing growth may eventually help in tempering prices, the underlying supply constraints could mean that any significant dip in home values might not be on the horizon anytime soon.

As the market evolves, stakeholders will be keeping a close eye on these trends to better navigate the future of Australia’s property landscape.

References:

https://www.forbes.com/advisor/au/personal-finance/property-market-update/