Weekly Market Update (4 October 2024)

1. House prices (Source: Dr. Andrew Wilson)

The national median house price increased by 0.3% in the September quarter to $1,149,547, with prices rising in 19 of the past 20 months. Unit prices fell by 0.2% in September, but are still up 6.1% year-on-year. Housing prices are expected to continue rising in Perth, Brisbane, and Adelaide due to affordability and high buyer activity. Sydney and Melbourne offer value buying opportunities as prices are still below early 2022 peaks. Factors like easing interest rate hikes, strong job growth, and high migration will support housing demand, though growth may moderate compared to 2023. Chronic housing undersupply, high rents, and low vacancy rates persist, but early signs of increasing rental supply and easing tenant demand are emerging. Overall, the housing market has seen mixed results across capital cities, with some cities experiencing strong price growth while others remain underperformers.

2. Home Value Index (Source: CoreLogic)

The housing market in Australia showed modest growth in the first month of spring, with national dwelling values increasing by 0.4%. However, this growth is lower than previous months, and some capital cities experienced a decline in values. The increase in real estate listings and softer vendor metrics indicate weaker selling conditions. Affordability constraints and reduced borrowing capacity continue to support stronger conditions in lower-priced housing markets. Regional housing market growth has also eased, with some parts of Western Australia, South Australia, and Queensland leading the regional trends.

3. Total property listings (Source: SQM Research)

In September 2024, new property listings in Australia increased by 5.4%, reaching 77,622 dwellings, while total listings decreased by 2.3%. Asking prices also rose by 0.7% after experiencing declines over the winter. The report highlights changes in listings, distressed properties, and asking prices across different cities, indicating varying market dynamics. Despite a mixed trend in listings activity, SQM Research expects an increase in listings for October and a surge in November. The housing market remains patchy, but stable prices are being driven by active buyers. Overall, the report suggests that the Australian property market is experiencing mixed trends in different cities, with some areas showing growth while others are cooling. 

4. National home prices (Source: PropTrack)

The national home prices in Australia increased by 0.04% in September and are now 5.67% higher than a year ago. The capital cities have shown varied growth, with Adelaide, Perth, and Brisbane recording the strongest growth in September, while Hobart and Melbourne saw prices fall. Over the past year, capital city prices have outpaced regional areas, but in September, growth in regional areas outpaced the combined capitals. Despite affordability challenges, strong housing demand has persisted, leading to 21 consecutive months of price growth. The increase in homes listed for sale has provided more choice for buyers, tempering the pace of price growth. Factors such as tax cuts, population growth, tight rental markets, and home equity gains continue to support price increases, but high interest rates, cost-of-living pressures, and subdued consumer sentiment are tempering growth. As the spring selling season approaches, prices are expected to continue rising, albeit at a slower rate, as buyers consider affordability constraints and uncertainty around future interest rate cuts.

5. Rental market (Source: Domain)

The rental market in Australia is showing signs of slowing down after a period of rapid growth, with some cities experiencing declines in rental prices. While annual rental gains remain positive, the pace of growth has slowed, indicating increased affordability pressures for tenants. Vacancy rates are improving, but limited supply continues to create a landlord’s market in most capital cities. Renters are advised to carefully monitor their local rental conditions using data indexes, as there may be variations at a more micro level. Overall, the rental market is in a state of flux, with some cities seeing stability or decline in rental prices.

6. National rental index (Source: CoreLogic)

The national rental index saw a minimal increase of 0.1% over the last quarter, the smallest change in four years, due to factors such as easing net overseas migration and rental affordability pressures. Rental growth has slowed, with cities like Sydney, Brisbane, and Canberra experiencing reductions in rents. This trend is attributed to a decrease in net overseas migration and affordability pressures. The national home value index has risen more than the rental index, putting downward pressure on rental yields. Aspiring homeowners staying in the rental market for longer and increased investor activity are influencing the rental market. The rental supply remains constrained, but investor activity may help support it.

7. Rental price growth (Source: PropTrack)

The latest data from PropTrack shows that rental price growth has slowed in most areas of Australia. Median weekly rents rose to $610, up 1.7% from the previous quarter, with both capital cities and regional areas contributing to the increase. However, the annual growth rate of 7% is the weakest since September 2021. Most Australian markets experienced lower annual price growth, except for Hobart, regional NSW, and regional Tasmania. Units saw stronger growth than houses, with a narrowing gap between their median rents. PropTrack expects price growth to continue to slow due to more rental stock and rising rental costs. Despite this, vacancy rates remain tight, but it is anticipated that conditions may become more balanced in the coming months.

8. Building approvals (Source: Sebastian Holloman)

Building approvals dropped in August, especially for higher density homes, creating a potential shortfall in new homes. Detached house approvals increased, but challenges for apartment builders persist due to rising tax imposts and regulatory costs. Confidence in new home markets varies across states, with Western Australia and Queensland leading in housing approvals while Melbourne’s market is adversely impacted by new property taxation policies.

9. CoreLogic Auction Results (Week ending 29 September 2024)

(Total Auction / Clearance Rate)

– Sydney: 1,199 / 60.9%

– Melbourne: 236 / 57%

– Brisbane: 154 / 52%

– Perth: 9 / 33.3%

– Canberra: 108 / 62%

– Adelaide: 129 / 75.2%

– Tasmania: 1 / 0%

– Combined Capitals: 1,836 / 60.6%