️ Highlights:
1. The national Home Value Index (HVI) in Australia increased by 0.9% in October, accelerating from a 0.7% rise in September.
2. The HVI has increased by 7.6% since January, leaving it only half a percent below the historic high recorded in April last year.
3. The quarterly pace of growth in housing values has slowed down, likely due to higher stock levels and stretched affordability.
4. Dwelling values in most capital cities have risen, with Perth, Brisbane, and Adelaide outperforming the others.
5. Regional markets are lagging behind capital city markets, with higher growth seen in the capitals across every state.
CoreLogic’s National Home Value Index (HVI) has reported an increase of 0.9% in October, marking an acceleration from the 0.7% rise in September. Since the trough in January, the national HVI has risen by 7.6%, now standing just half a percent below the historic high recorded in April of the previous year. Tim Lawless, CoreLogic’s Research Director, suggests that if the current growth rate persists, a new record high could be achieved by mid-November, recovering from the 7.5% drop in values recorded during the downturn between May 2022 and January 2023.
Market Dynamics
Although housing values are on the rise across most capital cities, there has been a noticeable deceleration in the quarterly pace of growth. The three months ending in June 2023 saw capital city home values rise by 3.7%, but this growth rate has since moderated to 2.6% over the three months to October. This slowdown is attributed to a combination of higher advertised stock levels and affordability constraints. With new listings increasing, it is unlikely that buyer demand will keep pace, especially in the context of high interest rates and low sentiment.
Regional and Capital City Trends
Dwelling values rose in all capital cities except Darwin during the month, with Perth, Brisbane, and Adelaide showing the strongest performance. Sydney, Perth, and Brisbane have seen dwelling values rise by more than 10% over the first ten months of the year. Brisbane has notably achieved a nominal recovery, reaching a new record high and erasing the previous 8.9% drop in values. Perth and Adelaide have also hit new record highs after recovering from earlier downturns. However, Sydney and Melbourne values remain below their peak levels, with Hobart experiencing the most significant decline from its recent high.
Regional Market Insights
Regional markets continue to lag behind their capital city counterparts, with the combined regional index up by 0.7% in October compared to a 0.9% rise across the combined capitals. The trend of higher growth in the capitals was consistent across every state. The majority of the 307 SA3 regions analyzed nationally have recorded value increases, although some regions, particularly in Victoria and New South Wales, have seen declines.
Conclusion
The CoreLogic Home Value Index for October 2023 indicates a continued recovery in the national housing market, albeit with emerging downside risks due to increased supply and affordability challenges. The full report by Tim Lawless provides a nuanced analysis of the property market’s current state and the potential trajectory in the coming months.