This week’s Australian Property Market Update – Latest Data, State by State September 17th 2024

Key takeaways

Our property markets are continuing to rise, but more slowly than earlier in the year.

CoreLogic estimates the combined value of residential real estate rose to $10.95 trillion at the end of August. I remember when it hit $9 trillion before the pandemic and everyone was excited.

Auction markets moved through a 4th consecutive week where more than 2,000 homes went under the hammer, with a preliminary auction clearance rate of 71.7%, up from 70.2% the week prior (revised down to 64.4% on finalised numbers).

The preliminary auction clearance rate fell below the 70% mark for the first time in six weeks, coming in at 69.4%. This is down from the previous week’s preliminary result of 71.7% which revised down to 63.2% on final numbers.

This week, CoreLogic Research reports that:

Sydney property prices increased 0.1% over the last week, also increased 0.2% over the last month and are 4.7% higher than they were 12 months ago.

Melbourne property prices remained flat over the last week, fell -0.1% over the last month, and are -1.3% lower compared to 12 months ago.

Brisbane property prices increased by 0.2% over the last week, increased 0.9% over the last month and are 14.9% higher than they were 12 months ago.

Overall, Australian capital dwelling prices increased by 0.5% over the last month and are now 7.2% higher than they were 12 months ago.

And it's likely property prices and rents are going to keep increasing throughout 2024.

This current property cycle has been driven by an undersupply of good properties relative to current demand pushing up property values and rents there was nothing to suggest there will be any significant change in the near future.

Unfortunately, the undersupply properties is going to persist for some time with all commentators agreeing that there is no way we're going to hit the housing construction targets required to meet our demand.

There are two opposing storylines circulating in media about Australian real estate ownership.

One storyline the media loves running is that the Great Australian Dream is dead and that young Australian adults can no longer afford to buy homes.

The other one, revealed whenever the Australian Bureau of Statistics releases official data on real estate finance, tends to suggest that the dream is very much alive – and indeed thriving.

The most recent stats from the ABS show we are currently seeing growing numbers of people buying homes as first-home buyers.

• With the value of new home lending rising 3.9% in July to $30.6 billion, it suggests Australians are buying $1billion worth of property every day.
• The value of new investor loans rose 5.4 per cent to $11.7 billion, which was 35.4 per cent higher than July 2023.
• The value of owner-occupier loans rose 2.9 per cent to $18.9 billion, 21.4 per cent higher than July 2023.
• The value of new owner-occupier first home buyer loans rose 0.8 per cent in July, which was 19.7 per cent higher than July 2023.

In other words, our housing markets have remained remarkably resilient despite all the dire predictions from the property pessimists.

On the auction front... with 2,387 auctions held over the week, last week was the busiest for homes going under the hammer since the week prior to Easter, when 3,519 auctions were held.

Last week’s auction volume was up 13% on the week prior and was the fifth busiest week so far this year.

This week, CoreLogic also reports that:

• Sydney property prices increased 0.1 over the last week,  also increased 0.2% over the last month and are 4.7% higher than they were 12 months ago.
• Melbourne property prices remained flat over the last week,  fell -0.1% over the last month, and are -1.3% lower compared to 12 months ago.

• Brisbane property prices increased by 0.2% over the last week, increased 0.9% over the last month and are 14.9% higher than they were 12 months ago.

Overall, Australian capital dwelling prices increased by 0.5% over the last month and are now 7.2% higher than they were 12 months ago.

Clearly, the property cycle is moving on but our markets are very fragmented.

Source: CoreLogic September 16th 2024

Of course, these are "overall" figures - there is not one Sydney or Melbourne or Brisbane property market.

And various segments of each market are performing differently.

At the beginning of this cycle the upper quartile of the market lead the upswing but now the lower quartile across every capital city has recorded a stronger outcome for housing values relative to its upper quartile counterpart over the past quarter.

The following chart shows how various segments of each capital city market are performing differently with median-priced properties performing well.

To help keep you up-to-date with all that's happening in property, here is my updated weekly analysis of data and charts as of 16th September 2024 provided by CoreLogic, and realestate.com.au.

Preliminary clearance rate nudges higher week-on-week

Remember... Auction clearance rates are a great "in time" indicator of both buyer and seller sentiment.

With 2,387 auctions held over the week, last week was the busiest for homes going under the hammer since the week prior to Easter, when 3,519 auctions were held.

Last week’s auction volume was up 13% on the week prior and was the fifth busiest week so far this year

The number of auctions scheduled for this week is set to rise further, with around 2,800 auctions currently scheduled, before dropping back the week after due to the AFL grand final long weekend.

See Corelogic's full auction report below.

Current property asking prices

Property asking prices are a useful leading indicator for housing markets - giving a good indication of what's ahead.

Here is the latest data available:

Sydney

Source: SQM Research

Melbourne

Source: SQM Research

Brisbane

Source: SQM Research

Perth

Source: SQM Research

Adelaide

Source: SQM Research

Canberra

Source: SQM Research

Darwin

Source: SQM Research

Hobart

Source: SQM Research

National

Source: SQM Research

Cap City Average

Source: SQM Research

The value of property asking prices as a leading indicator for housing markets is quite significant.

In fact it's more valuable than median prices which can be quite misleading.

Let's delve into why this is the case and how it impacts the real estate market.

1. Early Market Sentiment Indicator: Asking prices often reflect the current sentiment of sellers in the real estate market.
   
   If sellers are confident, they might set higher asking prices, anticipating strong demand.
   Conversely, if sellers are uncertain or perceive a market downturn, they might lower their asking prices to attract buyers.
   This makes asking prices a real-time indicator of market sentiment, often preceding changes in actual sales prices.
2. Predictive of Future Price Trends: Trends in asking prices can be predictive of where the actual property prices are headed.
   For example, a consistent rise in asking prices over a period can signal an upcoming rise in transaction prices.
3. Impact of Economic Factors: Economic factors such as interest rates, employment rates, and broader economic health influence asking prices.
   For instance, changes in the Reserve Bank of Australia's policies or shifts in the job market can quickly reflect in the asking prices, providing insights into how these factors are influencing the housing market.
4. Regional Variations: In a diverse market like Australia's, asking prices can also provide insights into regional disparities.
   For instance, the property markets in Melbourne and Sydney might behave differently from those in Brisbane or Perth. Asking prices can give early indications of these regional trends.
5. Influence of Supply and Demand: Asking prices are also a response to the balance of supply and demand in the market.
   In areas with limited supply and high demand, asking prices tend to be higher and vice versa.

However, it's important to note that while asking prices are a valuable indicator, they should not be used in isolation.

Other factors like actual sales prices, time on the market, auction clearance rates, and economic conditions also play crucial roles in understanding the property market dynamics.

READ MORE: The latest median property prices in Australia’s major cities

Last weekend's auction report

Capitals host busiest auction week since March

With 2,387 auctions held over the week, last week was the busiest for homes going under the hammer since the week prior to Easter, when 3,519 auctions were held.

Last week’s auction volume was up 13% on the week prior and was the fifth busiest week so far this year.

The number of auctions scheduled for this week is set to rise further, with around 2,800 auctions currently scheduled, before dropping back the week after due to the AFL grand final long weekend.

The preliminary auction clearance rate fell below the 70% mark for the first time in six weeks, coming in at 69.4%.

This is down from the previous week’s preliminary result of 71.7% which revised down to 63.2% on final numbers.

Melbourne hosted the most auctions, with 1,114 homes coming to market, the city’s highest auction count since the week leading into Easter (1,760).

The preliminary clearance fell to 68.5%, 2.6 percentage points lower than the week prior (71.1%, which was revised down to 60.9% once finalised).

Around 1,300 auctions are scheduled for the coming week across Melbourne.

864 auctions were held across the Sydney housing market last week, 11.3% higher than the previous week.

The preliminary clearance rate reduced to 70.6%, 2.6 percentage points lower relative to the week prior (73.2% which was revised down to 65.9% once finalised).

Around 1,050 auctions are scheduled for this week, rising to around 1,250 the week after.

Brisbane led the smaller auction markets in terms of volume, with 172 homes taken under the hammer, returning a preliminary clearance rate of 64.3%.

Adelaide continued to record an 80%+ preliminary clearance rate, with 82.2% of the 153 auctions so far reporting a successful result.

65 auctions were held across the ACT with an early clearance rate of 52.5%.

More broadly, CoreLogic is reporting a higher-than-average flow of new listings coming to market.

The four weeks ending September 15th saw almost 42,000 freshly advertised properties listed for sale, 5.8% higher than at the same time last year and 16.5% above the previous five-year average.

The rise in advertised stock levels is great news for buyers, who benefit from more choice, but sellers will need to be aware of the heightened competition, with advertised supply levels likely to rise further through spring and early summer.

Our rental markets

The national CoreLogic hedonic rent index was unchanged for a second consecutive month in August, and rent values declined in Sydney for a second consecutive month.

Nationally, rent values were up 7.2% in the year to August, which is the lowest annual growth rate since May 2021.

Annual rent growth is now slowing in every capital city market, except for Hobart, which is coming off a dip in rent values through 2023.

Sydney

Source: SQM Research

Melbourne

Source: SQM Research

Brisbane

Source: SQM Research

Perth

Source: SQM Research

Adelaide

Source: SQM Research

Canberra

Source: SQM Research

Darwin

Source: SQM Research

Hobart

Source: SQM Research

National

Source: SQM Research

Cap City Average

Source: SQM Research

Sellers of good properties are on strike

New listings levels continued to hold above average, with 39,994 new listings observed nationally over the four weeks to September 1st.

Winter historically has been a seasonally slow period for listings.

However, listing activity over the final month of winter was 4% above this time last year and 16.7% above the previous five-year average.

The problem is that very few are A Grade homes or investment grade properties. Owners of quality properties are still holding onto them.

At the national level, CoreLogic observed 140,107 for-sale listings over the four weeks to September 1st.

While overall listing levels have remained fairly subdued, the unseasonably high flow of new listings has seen stock levels accumulate, with the total listing count rising from around -25% below average at the start of 2024 to -12.4% below average.

Source: CoreLogic September 2024

Vendor metrics

As the following chart shows, houses are still being snapped up quickly by eager buyers.

At a national level, properties are taking slightly longer to sell than they were during the property boom of 2020 and 2021.

However, the number of days to sell a property is still relatively low (a sign of the tight supply situation for good properties), and vendor discounting is still at very low levels.

In general, houses are selling quicker than apartments, but the shortage of good properties on the market is seeing A-grade properties selling quickly with minimal discounting.

ALSO READ: Latest property price forecasts revealed. What’s ahead in our housing markets in the next year or two?

About Michael Yardney Michael is the founder of Metropole Property Strategists who help their clients grow, protect and pass on their wealth through independent, unbiased property advice and advocacy. He's once again been voted Australia's leading property investment adviser and one of Australia's 50 most influential Thought Leaders. His opinions are regularly featured in the media.