Australia’s housing upswing continued through the first month of 2024 with CoreLogic’s national Home Value Index rising 0.4% in January.
Following twin increases of 0.3% in November and December, the result marks the twelfth straight month of rising values.
Market performance, however, remains diverse around the country. Three capitals recorded a subtle decline over the month (Melbourne was down 0.1%, Hobart 0.7% and Canberra 0.2%), while values in Perth, Adelaide and Brisbane continued to rise at the monthly rate of 1% or more. Sydney values barely moved, lifting by just 0.2%.
CoreLogic research director Tim Lawless identified Perth as a stand-out among the capital cities for a persistently rapid rate of capital gains.
“The western capital continues to see housing demand outweigh supply, helping to push values 16.7% higher over the past 12 months”, Lawless said.
“Despite that, housing prices remain relatively affordable compared with most capital cities, with the median dwelling value sitting just under $677,000.”
House values continued rising at a faster rate relative to unit values in January, with the gap between the median capital city house and unit values rising to a record high of 45.2% in January. Across the combined capitals, detached housing values rose by half a percent over the month, adding the equivalent of around $4,800 to the median house value while units increased a smaller 0.1%, equivalent to a $900 lift.
“Since the commencement of the upswing, capital city house values have surged 11.0% higher while unit values are up 6.9%”, Lawless said. “It seems that most Australians are willing to pay a higher premium than ever for a detached home.”
Regional markets are now showing a stronger trend in value growth relative to the capital cities. The combined regional index rose 1.2% over the rolling quarter compared with a 1.0% rise across the combined capitals index.
“While both the combined capitals and combined regional markets are losing momentum in the pace of value growth, the capital city trend has slowed more sharply, mostly due to the flattening of growth conditions in Melbourne and Sydney”, Lawless noted.
“Across the other states, regional WA, SA and Queensland continue to record a slower pace of growth relative to their capital city counterparts; these are also the three regional markets where dwelling values are at record highs.”
Despite worsening housing affordability, the volume of home sales has held slightly above average over the past three months. CoreLogic estimates there were 115,241 dwellings sold over the three months ending January; 11.9% higher than the same period last year and 0.5% above the previous five-year average for this time of the year.
Lawless remains optimistic, however.
“Despite ongoing cost of living pressures, high interest rates, low consumer sentiment and affordability constraints, homes are still selling.
“Housing demand has been buoyed by high migration, but also tight rental markets that have probably incentivised renters to transition towards home ownership if they can afford to do so”, he concluded.
