By Michael Yardney October 21, 2024

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This week’s Australian Property Market Update – Latest Data, State by State October 22nd 2024

Property Market News
This week’s Australian Property Market Update – Latest Data, State by State October 22nd 2024

Key takeaways

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

CoreLogic estimates the combined value of residential real estate rose to $11 trillion at the end of September. I remember when it hit $9 trillion before the pandemic and everyone was excited.

There were s 2,510 auctions, a reduction from the 2,598 auctions held over the previous week. Over the same week last year, 2,463 auctions were held across the combined capitals.

According to CoreLogic, preliminary clearance rate improves week-on-week. The preliminary auction clearance rate edged higher last week, rising to 67.4% from 66.6% the week prior (revised lower to 60.8% on final numbers).

This week, CoreLogic Research reports that:

Sydney property prices remained flat over the last week, but increased 0.1% over the last month and are 4.0% higher than they were 12 months ago.

Melbourne property prices fell -0.1% over the last week, also fell -0.2% over the last month, and are -1.9% lower compared to 12 months ago.

Brisbane property prices increased by 0.1% over the last week, increased 0.7% over the last month and are 13.7% higher than they were 12 months ago.

Overall, Australian capital dwelling prices increased by 0.3% over the last month and are now 6.5% 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.

What’s ahead for interest rates?

While the Reserve Bank keeps telling us that rates won’t drop this side of Christmas, CBA Bank, Australia’s biggest lender, believes that we will get interest rate relief before the end of the year, and the "money market" still believes there is a 1 in 3 chance of this happening (down from a 50% chance after the last strong employment gains).

Recently, NAB has brought forward its expectations for the timing of rate cuts, now seeing a first cut in February 2025 (previously May). This is in line with Westpac and ANZ Bank’s forecasts.

Importantly, NAB sees a gradual pace of interest rate cuts back to 3.10% by early 2026.

This profile for the cash rate sees the RBA cautiously normalising policy settings back to neutral in an environment in which inflation has subsided, but the labour market remains close to full employment and GDP growth is recovering towards trend – effectively what economists call “a soft landing.”

The bank believes that while economic growth will remain very slow and likely finish the year around 1.0% year on year, underlying inflation will remain above the RBA’s target band for some time to come.

The NAB expects employment growth to remain robust and the unemployment level stabilising around 4 ½% in 2025.

On this trajectory, the labour market would not be an impediment to the RBA commencing a rate-cutting cycle nor would it generate pressure to rapidly ease policy settings.

On the auction front... there were s 2,510 auctions, a reduction from the 2,598 auctions held over the previous week.

Over the same week last year, 2,463 auctions were held across the combined capitals.

According to CoreLogic, preliminary clearance rate improves week-on-week

The preliminary auction clearance rate edged higher last week, rising to 67.4% from 66.6% the week prior (revised lower to 60.8% on final numbers).

See Corelogic's full auction report below.

This week, CoreLogic also reports that:

Sydney property prices remained flat over the last week, but increased 0.1% over the last month and are 4.0% higher than they were 12 months ago.
Melbourne property prices fell -0.1% over the last week, also fell -0.2% over the last month, and are -1.9% lower compared to 12 months ago.

Brisbane property prices increased by 0.1% over the last week, increased 0.7% over the last month and are 13.7% higher than they were 12 months ago.

Overall, Australian capital dwelling prices increased by 0.3% over the last month and are now 6.5% higher than they were 12 months ago.

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

Source: CoreLogic October 21st 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 21st October 2024 provided by SQM Research, CoreLogic, and realestate.com.au.

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

Property type	Price ($)	Weekly Change	Monthly Change %	Annual % change
All Houses	1,937,630	10.870	1.8%	3.5%
All Units	839,481	3.518	1.9%	8.1%
Combined	1,492,978	7.893	1.8%	4.2%

Source: SQM Research

Melbourne

Property type	Price ($)	Weekly Change	Monthly Change %	Annual % change
All Houses	1,248,169	4.840	1.0%	4.6%
All Units	612,068	-0.168	0.6%	3.4%
Combined	1,048,432	3.267	0.9%	4.1%

Source: SQM Research

Brisbane

Property type	Price ($)	Weekly Change	Monthly Change %	Annual % change
All Houses	1,175,371	-3.034	-0.3%	17.3%
All Units	663,839	1.011	2.2%	22.6%
Combined	1,047,538	-2.023	0.1%	18.0%

Source: SQM Research

Perth

Property type	Price ($)	Weekly Change	Monthly Change %	Annual % change
All Houses	1,065,651	-4.678	-0.9%	24.1%
All Units	569,253	4.547	1.3%	26.4%
Combined	936,092	-2.270	-0.6%	24.3%

Source: SQM Research

Adelaide

Property type	Price ($)	Weekly Change	Monthly Change %	Annual % change
All Houses	962,455	6.645	0.3%	20.3%
All Units	465,043	0.157	-1.3%	7.6%
Combined	873,131	5.480	0.1%	19.0%

Source: SQM Research

Canberra

Property type	Price ($)	Weekly Change	Monthly Change %	Annual % change
All Houses	1,172,363	5.249	1.5%	5.5%
All Units	597,916	1.196	0.8%	-0.8%
Combined	961,584	3.762	1.3%	3.6%

Source: SQM Research

Darwin

Property type	Price ($)	Weekly Change	Monthly Change %	Annual % change
All Houses	677,197	7.091	1.4%	-1.9%
All Units	385,444	0.889	0.5%	1.6%
Combined	562,678	4.657	1.2%	-1.0%

Source: SQM Research

Hobart

Property type	Price ($)	Weekly Change	Monthly Change %	Annual % change
All Houses	807,371	6.719	4.1%	1.0%
All Units	477,767	-4.949	-2.6%	-5.7%
Combined	757,513	4.954	3.4%	0.3%

Source: SQM Research

National

Property type	Price ($)	Weekly Change	Monthly Change %	Annual % change
All Houses	951,933	7.761	1.7%	8.7%
All Units	563,543	-1.490	0.5%	8.6%
Combined	868,456	5.773	1.5%	8.6%

Source: SQM Research

Cap City Average

Property type	Price ($)	Weekly Change	Monthly Change %	Annual % change
All Houses	1,405,766	9.571	1.2%	8.1%
All Units	707,794	-0.478	1.1%	9.3%
Combined	1,199,406	6.600	1.2%	8.1%

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.

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.
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.
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.
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.
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.

Last weekend's auction report

Preliminary clearance rate improves week-on-week

The preliminary auction clearance rate edged higher last week, rising to 67.4% from 66.6% the week prior (revised lower to 60.8% on final numbers).

The improvement was recorded across 2,510 auctions, a reduction from the 2,598 auctions held over the previous week.

Over the same week last year, 2,463 auctions were held across the combined capitals.

There were 1,069 auctions held across Melbourne last week, the third week running where more than 1,000 properties have gone under the hammer.

69.2% of auctions recorded a successful outcome, the highest preliminary clearance rate in six weeks.

The previous week’s preliminary clearance rate came in at 64.8%, revising down to 57.6%

Last week saw 978 homes auctioned across Sydney, returning a preliminary clearance rate of 70.5%, the highest in five weeks.

Over the previous week, 1,018 homes were taken to auction across the city and a preliminary clearance rate of 69.0% was recorded (revised to 63.0% on final numbers).

Brisbane held the most auctions across the smaller capitals (227), returning a preliminary clearance rate of 47.6% which was the weakest result since the last week of April last year (43.0%).

145 homes were auctioned in Adelaide, with 72.0% recording a successful result so far, the strongest result in three weeks.

71 auctions were held across Canberra with a preliminary clearance rate of 55.6%.

More than 3,000 homes are scheduled for auction this week, providing a timely test of the market’s depth.

Our rental markets

The national rental index increased by just 0.1% over the September quarter, the smallest change over a rolling three-month period in four years.

Sydney (-0.5%), Brisbane (-0.2%) and Canberra (-0.8%) all recorded a reduction in rents over the quarter and rental growth is clearly losing steam in most other capitals.

Melbourne and Perth both recorded a 0.3% rise in rents through the quarter, a sharp slowdown from a year ago when the quarterly trend was up 2.2% and 2.3% respectively.