️ Highlights:
Here are the top 5 takeaways from the article:
1. Australia’s housing market continued to rise in January, marking the 12th consecutive month of value increases.
2. While three capitals experienced slight declines in housing values, Perth, Adelaide, and Brisbane saw values rise at a monthly rate of 1% or more.
3. House values have been rising at a faster rate compared to unit values, with the gap between median capital city house and unit values reaching a record high of 45.2%.
4. Regional markets are showing stronger growth in value compared to capital cities, with regional WA, SA, and Queensland experiencing slower but record-high growth.
5. Despite worsening affordability, home sales volume has remained slightly above average, driven by high migration and tight rental markets incentivizing renters to transition to homeownership.
CoreLogic’s Home Value Index Shows Sustained Growth in January
Australia’s housing market has maintained its upward trajectory into the first month of 2024, with CoreLogic’s national Home Value Index (HVI) recording a 0.4% increase in January. This growth, slightly up from the 0.3% rises observed in November and December, marks the twelfth consecutive month of rising dwelling values, signaling a robust start to the year for the real estate sector.
Diverse Market Performance Across the Country
The overall positive trend in national dwelling values masks the varied performance across different regions. While Perth, Adelaide, and Brisbane experienced significant monthly value increases of 1% or more, three capital cities—Melbourne, Hobart, and Canberra—saw slight declines. This diversity underscores the complex interplay of supply and demand dynamics, as well as affordability challenges, affecting different parts of the country.
Perth Leads with Strong Capital Gains
Perth stands out among the capitals for its rapid and consistent capital gains, with home values rising by 1.6% in January. This growth trend, closely aligned with the city’s performance in the preceding months, has pushed Perth’s housing values up by 16.7% over the past year. Despite these gains, Perth’s housing market remains relatively affordable compared to other capitals, with a median dwelling value just under $677,000.
Detached Houses Outperform Units
The gap between the median values of capital city houses and units widened to a record 45.2% in January, with detached houses appreciating at a faster pace than units. This disparity highlights a growing preference among Australians for detached homes, despite the premium price attached to such properties.
Regional Markets Show Stronger Value Growth
Regional markets have begun to exhibit a stronger trend in value growth compared to capital cities. The combined regional index rose by 1.2% over the quarter, outpacing the 1.0% increase across the combined capitals. This shift reflects a broader slowdown in the pace of value growth, particularly in Melbourne and Sydney, while regional markets in Western Australia, South Australia, and Queensland continue to thrive.
Sales Volume Remains Above Average
Despite challenges such as cost of living pressures, high interest rates, and affordability constraints, the volume of home sales has remained slightly above average in recent months. CoreLogic estimates that 115,241 dwellings were sold in the three months ending January, indicating a resilient demand for housing fueled by high migration and tight rental markets.
Conclusion
The continued upswing in Australia’s housing market into 2024 reflects a dynamic and resilient sector. With national dwelling values on the rise and regional markets showing particular strength, the real estate landscape appears poised for sustained growth. This trend, supported by steady sales volumes and a preference for detached homes, underscores the ongoing appeal of the Australian housing market.