The Australian housing market is stabilising following months of price increases, according to the latest update by NAB Group Economics.
NAB’s research shows that values rose 1.5% last month, similar to August and September. However, the trend shows the market is continuing to slowly lose momentum since moving through a peak monthly rate of growth in March 2021, when values were up 2.8%.
Market conditions are also changing around the country. Perth values fell for the first time in 16 months, to be just 0.1% lower. At the other end of the spectrum, Brisbane has taken over as the fastest growing market with housing values up 2.5% in October. Adelaide and Hobart followed, with both markets increasing 2.0% in value over the month, while Sydney and Melbourne have seen the monthly rate of growth more than halved since March 2021, when they reached 3.7% and 2.4% respectively.
In the regions, New South Wales and Queensland led the pace, Western Australia was the only region to record a fall.
The NAB economists attribute the slowing growth conditions to weakening affordability, rising supply levels, and reduced stimulus.
“Housing prices continue to outpace wages by a ratio of about 12:1, which is one of the reasons why first home buyers are becoming a progressively smaller component of housing demand. New listings have surged by 47% since the recent low in September and housing focused stimulus such as HomeBuilder and stamp duty concessions have now expired.
Combining these factors with the subtle tightening of credit assessments, which went live on November 1st, and it’s highly likely the housing market will continue to gradually lose momentum.”
Although the monthly pace of growth is easing, the report suggests that the annual trend has continued to rise, which is a factor of the stronger growth conditions throughout early 2021.
Nationally home values are up 21.6% over the year to October, with half the capitals recording an annual growth rate in excess of 20%.
