Australia’s housing crisis may be starting to ease with dwelling price rises tapering off and rents increasing at their slowest pace in four years, data groups say.
Property values increased 0.4% in September, close to the 0.3% rise recorded for both the previous two months, CoreLogic reported. PropTrack’s housing index was basically flat, rising just 0.04% for the month.
Four capital cities posted falls in dwelling prices for the September quarter. CoreLogic reported Melbourne’s prices sank 1.1%, with Canberra (-0.3%), Hobart (-0.4%) and Darwin (-0.7%) also in retreat for the quarter. Home prices rose in Perth (4.7%), Adelaide (4%), Brisbane (2.7%) and Sydney (0.5%) in that period.
More owners were looking to sell, boosting the flow of new listings to 3.2% higher than a year ago and 8.8% above the rolling five-year average for September, CoreLogic said.
“The rise in real estate inventory is a seasonal trend, with spring and early summer one of the busiest periods of the year for selling,” said Tim Lawless, CoreLogic’s research director. “However, the flow of freshly advertised housing stock hasn’t been this high at this time of the year since 2021.”
Sydney remained the most expensive city. Since the onset of Covid in March 2020, median dwelling prices were up 29.2%, or $268,627, to a record of almost $1.2m. Perth posted the largest increase since then, of almost 75% or $341,000, to nearly $800,000, CoreLogic said.
The Reserve Bank has lifted interest rates 13 times over the past 18 months to a 13-year high of 4.35%, sapping some of the demand for housing amid other cost-of-living increases. The jobless rate has also inched higher to 4.2% – up from a low of 3.5% at the end of 2022 – adding to housing affordability strains.
The latest weekly auction figures also revealed a weakening in demand relative to supply. The preliminary auction clearance rate dropped to 64.5% last week – in a period that included the AFL grand final in Melbourne – which is the lowest initial reading since December 2022, CoreLogic said.
Some relief may also be on the way for renters, with CoreLogic’s national rental index up 0.1% in the September quarter. It was the smallest rolling three-month increase in four years, and may reflect a 19% slowdown in migration from its peak in early 2023.
“The March quarter of 2024 saw 133,800 net overseas migrants arrive in Australia, 31,700 fewer than a year prior, helping to take some pressure off rental demand,” Lawless said
But PropTrack’s senior economist Eleanor Creagh said national home prices still were up 5.88% from a year earlier and the market may have further to climb.
“July’s tax cuts boosted borrowing capacities and buyers’ budgets, while the persistent growth in home prices is likely motivating some to overcome affordability challenges and transact,” Creagh said.
“Ahead, prices are expected to lift through the typically busier spring selling season, albeit at a slower pace.”
