December 1st 2024.
New data has revealed that the housing market in major cities across Australia is experiencing a downturn, with a slowdown in price growth. According to CoreLogic's National Home Value Index, there was only a 0.1 per cent increase in November, making it the weakest national result since January 2023. This was the 22nd consecutive month of growth, but it may be a sign that rising prices are coming to an end.
Tim Lawless, the research director at CoreLogic, shared that the downturn is gaining momentum in Melbourne and Sydney. He also noted that the mid-sized capitals, which have been leading the growth cycle, are also starting to lose steam. In Melbourne, for example, housing values have fallen in 10 out of the past 12 months, with a 0.4 per cent drop in November alone. This brings the total decline in values to 2.3 per cent over the last year. In Sydney, it seems that September marked the peak of the cycle, with consecutive declines in October and a larger 0.2 per cent drop in November.
Looking at the quarterly data, four out of the eight capitals have recorded a decrease in values, including Melbourne, Darwin, Sydney, and Canberra. Lawless highlighted that while the mid-sized capitals and regional markets have been supporting the growth of the national index, the momentum is starting to fade in these areas as well.
In Perth, however, housing values continue to rise, with a 1.1 per cent gain in November and a three per cent increase in the past quarter. Despite this, it is still the slowest quarterly growth since April 2023. Similarly, Brisbane's quarterly growth has eased to 1.8 per cent, the slowest pace since March 2023, and Adelaide's 2.8 per cent rise in the last three months is the smallest outcome since June 2023.
Outside of the major cities, regional housing trends have been slightly stronger, with the combined regional index seeing a 1.1 per cent increase in the last three months, compared to a 0.3 per cent rise in the combined capitals. As more homes enter the market, listings in capital cities have also gone up by 16 per cent since August. In Sydney and Melbourne, listings are now 10.4 per cent and 9.1 per cent above their previous five-year average, making it the highest for this time of year since 2018.
However, while more homes are becoming available, buyer interest is slowing down. CoreLogic estimates that home sales in the past three months have decreased by 4.6 per cent compared to a year ago, and is two per cent below the five-year average. In Sydney, this trend is even more significant, with quarterly sales down by over 15 per cent compared to last year and the five-year average.
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