Home values and sales volumes lifted again in March, new figures show.
CoreLogic’s national Home Value Index rose 0.6% in March, on par with February’s increase, taking the current upswing in housing values through its 14th straight month of growth.
Since declining 7.5% between April 2022 and January 2023, the national index has increased 10.2%, or, in dollar terms, by approximately $71,832, rising to new record highs each month since November last year.
Every capital city except Darwin recorded a rise in values over the month, although CoreLogic research director Tim Lawless noted the gains continue to be diverse.
“At one end of the scale we have Perth’s housing market where values were up 1.9% over the month, followed by Adelaide and Brisbane with 1.4% and 1.1% growth”, Lawless said.
“The remaining capitals are showing much lower rates of change, although Melbourne is the only capital city to record a negative quarterly movement, down 0.2% over the first three months of the year.”
The national quarterly pace of growth has accelerated from 1.4% in Q4 last year to 1.6% in Q1 2024. Although housing values are rising faster than at the end of last year, the quarterly trend of growth has halved relative to the middle of last year when home values were rising 3.3% quarterly.
Lawless believes the diversity in housing value outcomes can be explained by significant differences in factors like housing affordability, demand-side pressures from population growth and shortcomings in housing supply.
“Focusing on the extreme growth conditions in Perth, despite such a rapid pace of capital gains, housing values remain relatively affordable compared with the larger capital cities”, he said..
“Housing remains in short supply and purchasing demand is still high due to interstate and overseas migration rates that are well above average.”
After being led by the upper quartile most of last year, the strongest growth conditions have migrated to the lower quartile across most capital city markets. Across the combined capital cities, lower quartile home values increased by 3.1% in the first quarter of the year compared with a 0.7% rise across the upper quartile of the market. This trend of stronger conditions across the lower value sector was evident in each of the major capitals.
“With housing affordability becoming more challenging and borrowing capacity lower than a year ago, it’s no surprise to see demand being skewed towards the middle-to-lower end of the value spectrum”, Lawless said.
Regional housing markets are also recording a rise in values, with similar levels of diversity as their capital city counterparts. Regional Victoria stands out with the softest growth conditions, with values down 0.3% in the first quarter of the year; the only broad ‘rest of state’ region to record a decline in values in the year-to-date.
The volume of home sales through the first quarter of the year was estimated to be 9.5% higher relative to the same time last year, although comparison is from a relatively low base, with the housing market bottoming out from the downturn at the beginning of last year. Compared to the previous decade average for this time of the year, dwelling sales are estimated to be 3.7% higher.
