August 2024 Property Market Update: Winter Slows Down Property Market Growth
03 Sep, 2024
Updated: 03 Sep, 2024
In August, CoreLogic’s Home Value Index (HVI) showed a 0.5% rise in national home values, marking the 19th consecutive month of growth. This increase slightly exceeds the revised 0.3% increase seen in July. However, the pace of growth is slowing. The quarterly increase in national home values stands at 1.3%, less than half of the 2.7% growth rate recorded in the same period last year. Demand for housing still outstrips supply, but the balance between advertised supply and demand is becoming more evenly matched. While some regions show higher-than-average listings, others, like Perth and Adelaide, see listings below the five-year average, indicating diverse market dynamics.
Here’s CoreLogic’s report in full.
State Performance Overview
| State | August Home Value Change | Description |
|---|---|---|
| Sydney | +0.3% | Home values in Sydney experienced modest growth, continuing a mild upward trend. |
| Melbourne | -0.2% | Melbourne showed a decline, with its median dwelling value slipping below those of Adelaide and Perth. |
| Brisbane | +1.1% | Brisbane continued its strong performance, recording solid gains in home values. |
| Adelaide | +1.4% | Adelaide showed an increase, driven by high demand and low supply. |
| Perth | +2.0% | Perth led the capitals with the highest monthly increase, reflecting robust market conditions. |
| Hobart | -0.1% | Hobart showed a slight decline, pointing to a cooling market. |
| Darwin | -0.2% | Darwin experienced a minor decrease in home values, indicating stable but softening conditions. |
| Canberra | -0.4% | Canberra recorded a decline, reflecting weaker market performance. |
Regional Markets Vs. Capital Cities
The combined regional areas saw a quarterly growth of 1.1% in dwelling values, slightly below the 1.3% growth recorded in combined capital cities. Annual growth was nearly identical, with regional areas up 7.0% and capital cities up 7.1%. Both markets have shown consistent but modest increases in home values, reflecting a broader trend of balanced growth across Australia’s housing markets.
Rental Market Overview
The rental market is showing signs of easing, with the national CoreLogic hedonic rent index remaining unchanged in August, for the second consecutive month. This marks the lowest annual growth rate in rent values since May 2021, indicating a slowdown in rental price increases. While some capital cities, like Hobart, show a rebound in rents, others, such as Sydney and Brisbane, have recorded consecutive monthly declines, pointing to a shift in the rental market dynamics.
Market Forecast
The outlook for the housing market remains cautious. Despite the ongoing rise in housing values, growth is expected to slow due to affordability constraints, high interest rates, and economic pressures. With affordability stretching further, particularly in high-growth cities like Brisbane, Adelaide and Perth, a sustained rise in housing values seems increasingly unlikely. The large discrepancy between what is affordable for the average income household and current median dwelling values limits the buyer pool, likely skewing it towards wealthier individuals and investors. The spring selling season may show varied results, with markets like Victoria and Tasmania facing challenges due to softer price performance and accumulating listings.
