Sydney housing market update [video] | April 2024

Last month's 0.6% lift in national home values marked the 14th consecutive month-on-month rise, taking the index 1.6% or about $12,000 higher in the March quarter.

Since declining 7.5% in the downturn between April 2022 and January 2023, the national home value index has increased by 10.2%, adding approximately $72,000 to the median value of a home and pushing to new record highs each month since November last year.

The national quarterly pace of growth accelerated from 1.4% in Q4 last year to 1.6% in Q1 this year.

After slipping lower in November and December last year, Sydney home values have recorded three consecutive months of growth, taking values 0.9% higher over the first quarter of the year, adding roughly $10,000 to the median dwelling value.

Though housing values are rising faster than at the end of last year, the quarterly trend has halved relative to the middle of last year when home values were rising at 3.3% quarter-on-quarter.

Rate hikes, cost of living pressures and worsening housing affordability are all factors that have contributed to softer conditions since mid-last year.

However, an undersupply of housing relative to demand continues to keep upwards pressure on home values despite these headwinds.

The monthly movements in housing values across our capital cities continue to be punctuated by diversity.

Growth in unit values has been slightly stronger over the quarter, up 1% compared with a 0.9% rise in house values.

After being led by the upper quartile, most of last year, the strongest growth conditions have migrated to the lower quartile across most capital city markets.

Across the combined capitals, lower quartile home values increased by 3.1% in the first quarter of the year, compared with a 0.7% rise across the upper quartile of the market.

Lower quartile house values led the pace of capital gains, rising 1.9% through Q1.

This trend of stronger conditions across the lower-value sector was evident in each of the major capitals.

With housing affordability becoming more challenging and borrowing capacity lower than a year ago, it's no surprise to see demand now being skewed towards the middle to lower end of the value spectrum.

Demand for housing based on the estimated number of home sales was 1.8% higher than a year ago, but tracking 5.4% below the previous five-year average for this time of the year.

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About Tim Lawless Tim heads up the Core Logic RP Data research and analytics team, analysing real estate markets, demographics and economic trends across Australia. Visit www.corelogic.com.au