The Australian housing market upswing continued in the first month of 2024 with property values rising 0.4%.
As house prices rose, renters continued to feel pain, with the national rental index recording its biggest monthly rise since April. Rents were up 0.8% in January after a 0.65% rise in December.
The 0.4% increase in home values, according to data group CoreLogic, marked the 12th straight month of value rises, and was up from the 0.3% increases in November and December.
Despite the headline result, housing market performance remained varied around the country. Three capitals recorded a subtle decline over the month (Melbourne -0.1%, Hobart -0.7% and Canberra -0.2%), while, Perth, Adelaide and Brisbane values continued to rise at the monthly rate of 1% or more.
CoreLogic’s research director, Tim Lawless, said Perth led the capital city increases, rising 1.6% in January.
“The western capital continues to see housing demand outweigh supply, helping to push values 16.7% higher over the past 12 months. 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 to unit values in January, with the gap between the median capital city house and unit values at a record high of 45.2%.
Across the combined capitals, detached housing values rose by half a per cent over the month, adding the equivalent of about $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 were 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 said.
“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 held slightly above average over the past three months.
CoreLogic estimated 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.
Similar to housing values, Perth led the pace for rental growth over the rolling quarter, with unit rents topping the list with a 3.7% rise over the three months ending January.
While Canberra and Hobart had recorded weaker rental conditions over the past year, Darwin was the only capital city to record a decline in rents over the rolling quarter, with unit rents down 1.6% and house rents falling 0.4%.
Lawless said it was common to see rent growth accelerating between January and March. “It’s looking like we’ll see a similar trend this year with the usual pattern of higher growth emerging in January,” he said.
