Following years of resilient growth, home values in some states reported falls over the final months of 2024, according to new data released this week by Corelogic.
CoreLogic’s Home Value Index (HVI) showed values were down 0.1% nationally in December, after peaking in October and holding flat in November.
Values continued to rise through December in Brisbane (up 0.4%), Adelaide (0.6%), Perth (0.7%), and Darwin (0.4%), in December, but fell in Sydney (down 0.6%), Melbourne (0.7%), Hobart (0.5%), and Canberra (0.5%).
The December decline was enough to drag the quarterly change into negative territory, also down 0.1%, to mark the end of what has been a surprisingly strong and resilient period of growth between February 2023 and October 2024 – a period characterised by high interest rates, cost of living pressures and reduced borrowing capacity.
CoreLogic research director Tim Lawless said the decline in values is no surprise.
“This result represents the housing market catching up with the reality of market dynamics.
“Growth in housing values has been consistently weakening through the second half of the year, as affordability constraints weighed on buyer demand and advertised supply levels trended higher.”
The first half of 2024 saw national home values rise 4.1%, before slowing to just 0.7% through the second half of the year, with five of the eight capitals recording a decline in values between July and December.
In annual terms, Australian home values were up 4.9% in 2024, adding approximately $38,000 to the median value of a home.
Three of the capitals recorded a decline in values over the year; Melbourne (down 3.0%), Hobart (0.6%) and the ACT (0.4%). At the other end of the spectrum were the mid-sized capitals, with Perth values surging 19.1% higher over the year, Adelaide up 13.1% and Brisbane values 11.2% higher.
“Although the mid-sized capitals recorded double-digit annual growth in 2024, it is clear these markets have passed their peak rate of growth”, Lawless said.
“The rolling annual change in Perth has eased from a cyclical peak of 24.7% over the year ending July, Adelaide’s 12-month trend has slowed from 14.6% in August, and Brisbane’s annual gains peaked in April at 17.0%.”
December also marked a change in the quarterly capital city rankings, with Adelaide overtaking Perth as the strongest market with values up 2.1% in the December quarter, compared with a 1.9% rise in Perth values and a 1.3% increase in Brisbane.
“Extremely low advertised stock levels have continued to support strong growth conditions across Adelaide, with stock levels tracking -34% below the previous five-year average in mid-December”, Lawless added.
“Perth, on the other hand, has seen a clear lift in advertised supply, which has provided buyers with more choice and less urgency, supporting a sharper slowdown in value growth relative to Adelaide.”
The most affordable quartile of the capital city markets has shown the highest rates of value growth in 2024. Across the combined capitals, housing values in the lower quartile of the market were up 9.8% in 2024, while upper quartile values rose by only 1.5%.
“With worsening affordability constraints and reduced borrowing capacity, we have seen buyer demand pushed towards lower priced markets, which has, in turn, supported stronger growth conditions in these areas”, Lawless said.
Regional housing markets finished the year on a stronger note, with values up 6.0% over the year, compared with a 4.5% rise across the combined capital index. Like the capital cities, regional value growth was dominated by the regional areas of WA (up 16.1%), SA (12.5%) and Queensland (10.5%). At the other end of the spectrum, regional Victoria and the NT were the only ‘rest of state’ markets to record a decline in values through 2024, down 2.7% and 4.7%, respectively.
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