WEEKLY E-MAIL

4 March 2024

AUSTRALIAN PROPERTY PRICES

By Rebecca Dhillon

Recent data from CoreLogic indicates Australian property prices rose for a thirteenth consecutive month in February, indicating the housing market has stayed resilient in the face of the RBA’s aggressive tightening cycle.

The CoreLogic data aims to measure month to month movements in the value of Australia housing markets. Rather than relying solely on transacted sale prices to provide a measure of housing market conditions, CoreLogic use a methodology which is trained on transacting properties, and then imputes a value for each observable property in an area. The imputed value takes into account the attributes of individual properties as part of the analysis.

House prices fell significantly in calendar 2022 (down 6.4%) but have been solidly trending upwards over the past year. National house prices now sit 1.8% above the previous cyclical peak of April 2022, which was reached on the eve of the RBA’s tightening cycle.

The growth in house prices has arisen from the imbalance between the supply of new homes and the surge in population growth (the population jumped 624,000 through 2022/23), with new home builds not keeping pace with the uplift in population growth. As a result, vacancy rates have dropped to record lows and the rental market is tight.

While prices are steadily increasing in Brisbane (0.9%), Perth (1.8%) and Adelaide (1.1%), gains in Sydney have been more modest (0.5%) and Melbourne is largely tracking sideways (0.1%).

Foreign buyers are also more active in the market with new sales to foreign buyers hitting a 6.5 year high of 10.1% in the last quarter of 2023. According to the latest NAB residential property survey, foreign demand for new property increased for the fifth straight quarter as can be seen below.

Momentum indicators remain strong, with auction clearance rates so far in 2024 tracking higher than they were in 2023 and the RBA’s most recent rate hike in November 2023 appearing to have done little to weaken housing sentiment nationally.

Property prices are likely to continue increasing as housing demand will continue to outstrip supply for some time as the country continues to experience record levels of immigration, and supply chain issues and a lack of skilled labour impacting the construction of new dwellings.

Rebecca Dhillon
Senior Para-Planner
Authorised Representative No. 453075

If you have any questions or comments, please email me at rebecca@gfmwealth.com.au

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