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Is the housing market fizzling out?

By Orana Durney-Benson
01 December 2023 | 10 minute read
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Heat fades out of Australia’s housing market, as the nation’s combined capitals record the slowest home value growth since February.

In November, home values across the country rose 0.6 per cent, marking the smallest gain in nine months, according to CoreLogic.

Despite the anticlimactic growth, the Home Value Index (HVI) still reached a new record high for 2023. Over the past 10 months, housing values have leaped up 8.3 per cent from the trough in January 2023, marking a clear V-shaped recovery.

Multispeed trends are becoming increasingly evident across the country, with growth and decline rates varying substantially between cities. Melbourne, Hobart and Darwin all recorded decreases in housing values, with the rate of decline sitting at -0.1 per cent in Melbourne and Hobart, and -0.3 per cent in Darwin.

While Sydney’s monthly housing values did not decrease from October, the final week of November did record a downturn, bringing the monthly total increase to just 0.3 per cent. CoreLogic predicts that Sydney will follow Melbourne’s lead in the coming months, with negative growth expected in December.

Tim Lawless, research director at CoreLogic, explained: “The Melbourne Cup day rate hike has clearly taken some heat out of the market, but other factors like rising advertised stock levels, worsening affordability and persistently low consumer sentiment are also acting as a drag on value growth in some markets.”

But on the other hand, Perth, Brisbane and Adelaide recorded house price growth in November. The rate of increase rested at 1.9 per cent, 1.3 per cent and 1.2 per cent respectively, with Perth seeing its highest monthly gain since March 2021.

Mr Lawless stated: “The imbalance between available supply and demonstrated demand is keeping strong upwards pressure on housing values across these markets, despite the downside factors leading to weaker housing market conditions across the lower eastern seaboard.”

According to CoreLogic, the disparity between growth rates in regional and metropolitan markets has been bridged. Both regional and urban markets recorded a 0.6 per cent increase in house values in November.

Nevertheless, the total recovery rate for capital cities since January 2023 is still over double the growth rate for the regions, with city prices up 9.6 per cent and regional prices up 4.3 per cent in the last 10 months.

CoreLogic confirmed that regional Australia’s home values remain -1.8 per cent below the record high reached in May 2022, with the worst downswings in Victoria and NSW.

Is the housing market fizzling out?
melbourne hobart darwin reb fkspnj
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