Values improved in patches around the country in October, new data shows.
CoreLogic’s national Home Value Index (HVI) recorded a 0.3% rise in October, the 21st month of growth since the cycle commenced in February last year.
The subtle positive movement was supported by the mid-sized capitals, led by Perth with a 1.4% rise over the month, offsetting declines in Darwin (down 1.0%), Canberra (0.3%), Melbourne (0.2%) and Sydney (0.1%), as well as regional Victoria (0.2%).
Annual growth in national home values has continued to ease, reducing to 6.0% over the 12 months ending October, down from a recent peak annual growth rate of 9.7% in February.
The fall in Sydney values was the first monthly decline since January 2023, following a short but sharp 12.4% drop in values between February 2022 and January 2023.
Weaker conditions have been led by the most expensive areas of the market, with a 0.6% fall in upper quartile house values over the month and a 1.1% drop over the past three months. In comparison, Sydney’s lower quartile house and unit values both recorded a half a percent rise in values in October.
CoreLogic’s research director Tim Lawless noted that the stronger performance across the more affordable end of the market is a consistent theme across the capital cities.
“A combination of less borrowing capacity and broader affordability challenges, as well as a higher-than-average share of investors and first home buyers in the market is the most likely explanation for stronger conditions across the lower value cohorts of the market”, Lawless said.
“The past three months has seen the lowest quartile either record a higher growth rate or smaller decline relative to the upper quartile or broad middle of the market across every capital city except Canberra.”
While the mid-sized capitals are still leading the pace of value growth, these markets are also losing momentum. Adelaide values have risen by more than 1% each month since March, but conditions look to be slowing here as well with October’s 1.1% gain marking the lowest monthly rise since June. Brisbane’s monthly gain of 0.7% was the lowest since July.
Slower growth in home values has been accompanied by a rise in advertised stock levels. Based on a rolling four week count of listings to October 27th, advertised inventory has increased 12.7% since the end of winter across the combined capitals, with the largest increase occurring in Perth where listings are 20.6% higher, albeit from an exceptionally low base.
“Total listings are now 13.2% above the previous five-year average in Sydney and 13.0% higher in Melbourne”, Lawless said, helping to explain the weaker conditions in these markets as buyers benefit from more choice and less urgency in their decision making.
“Despite the rise in listings across the mid-sized capitals, Perth, Adelaide, and Brisbane are still seeing advertised stock levels more than 20% below the five-year average for this time of the year.
“These markets remain well and truly in favour of sellers, although the balance is starting to gradually improve”, he concluded.
