By Michael Yardney November 25, 2024

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This week’s Australian Property Market Update – Latest Data, State by State November 26th 2024

Property Market News
This week’s Australian Property Market Update – Latest Data, State by State November 26th 2024

Key takeaways

It looks like we’ll have to wait longer for rate cuts

Westpac has revised their view of the most likely scenario for the path of the RBA's cash rate, pushing out the start date of the RBA rate-cutting cycle from February to May 2025, but more front-loaded than previously assumed.

In the meantime, our property markets continue 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 October. I remember when it hit $9 trillion before the pandemic and everyone was excited.

This week, CoreLogic Research reports that:

*Sydney property prices fell -0.1% over the last week, fell -0.2% over the last month and are 3.3% higher than they were 12 months ago.

*Melbourne property prices remained flat over the last week, fell -0.2% over the last month, and are -2.4% lower compared to 12 months ago.

*Brisbane property prices increased by 0.2% over the last week, increased 0.7% over the last month and are 12.5% higher than they were 12 months ago.

Overall, Australian capital dwelling prices increased by 0.2% over the last month and are now 5.8% higher than they were 12 months ago.

2,577 auctions were held last week, down from 2,898 the week prior.

The preliminary auction clearance rate came in at 65.3% last week, up slightly from the week prior.

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.

It looks like we’ll have to wait longer for rate cuts

This adjustment aligns with National Australia Bank's (NAB) earlier projection, which also shifted the expected rate cut to May 2025.

Westpac's Chief Economist, Luci Ellis, explained that the decision to delay the forecasted rate cut reflects the RBA's cautious approach amid Australia's robust labour market and persistent inflationary pressures.

The convergence of these forecasts from two of Australia's major banks underscores a shared perspective on the RBA's monetary policy trajectory.

Interestingly, Dr. Andrew Wilson made this forecast a number of months ago in our weekly Property Insiders chat, giving firm evidence as to why this would be a more likely date.

What this means for property investors

In the Short Term: Expect subdued demand, cautious investor activity, and rising rents due to a lack of supply.
In the Medium Term: As the rate cut draws closer and confidence improves, the market will begin to pick up, especially in well-located suburbs and premium markets we’re homeowners and buyers have significant equity
In the Long Term: The fundamental undersupply of housing, combined with population growth, will reignite property price growth when borrowing conditions ease.

On the auction front... 2,577 auctions were held last week, down from 2,898 the week prior.

The preliminary auction clearance rate came in at 65.3% last week, up slightly from the week prior.

According to CoreLogic, preliminary clearance rate holds below 70% for 11th consecutive week.

See Corelogic's full auction report below.

This week, CoreLogic also reports that:

Sydney property prices fell -0.1% over the last week, fell -0.2% over the last month and are 3.3% higher than they were 12 months ago.
Melbourne property prices remained flat over the last week, fell -0.2% over the last month, and are -2.4% lower compared to 12 months ago.

Brisbane property prices increased by 0.2% over the last week, increased 0.7% over the last month and are 12.5% higher than they were 12 months ago.

Overall, Australian capital dwelling prices increased by 0.2% over the last month and are now 5.8% higher than they were 12 months ago.

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

Source: CoreLogic November 25th 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 25th November 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	1,945,197	-11.727	0.4%	4.8%
All Units	826,733	-5.333	-2.1%	6.5%
Combined	1,491,928	-9.136	-0.2%	4.8%

Source: SQM Research

Melbourne

Property type	Price ($)	Weekly Change	Monthly Change %	Annual % change
All Houses	1,249,236	-2.256	0.0%	3.7%
All Units	613,286	0.802	0.2%	2.7%
Combined	1,049,373	-1.295	0.0%	3.3%

Source: SQM Research

Brisbane

Property type	Price ($)	Weekly Change	Monthly Change %	Annual % change
All Houses	1,181,126	-1.246	-0.3%	15.9%
All Units	671,752	0.438	0.8%	23.6%
Combined	1,053,747	-0.825	-0.1%	16.9%

Source: SQM Research

Perth

Property type	Price ($)	Weekly Change	Monthly Change %	Annual % change
All Houses	1,090,210	-1.061	1.9%	25.6%
All Units	589,498	4.434	2.6%	29.0%
Combined	959,440	0.374	2.0%	26.0%

Source: SQM Research

Adelaide

Property type	Price ($)	Weekly Change	Monthly Change %	Annual % change
All Houses	943,283	5.179	-1.2%	15.7%
All Units	474,264	5.936	4.0%	10.7%
Combined	860,836	5.315	-0.7%	15.1%

Source: SQM Research

Canberra

Property type	Price ($)	Weekly Change	Monthly Change %	Annual % change
All Houses	1,199,053	13.809	1.9%	1.6%
All Units	601,143	-1.906	0.5%	0.7%
Combined	979,216	8.031	1.6%	0.9%

Source: SQM Research

Darwin

Property type	Price ($)	Weekly Change	Monthly Change %	Annual % change
All Houses	701,668	11.132	3.0%	2.3%
All Units	380,618	-0.952	-1.5%	1.3%
Combined	575,662	6.389	1.8%	2.0%

Source: SQM Research

Hobart

Property type	Price ($)	Weekly Change	Monthly Change %	Annual % change
All Houses	808,808	2.010	0.9%	1.8%
All Units	489,987	4.013	2.8%	-8.6%
Combined	760,535	2.313	1.1%	0.6%

Source: SQM Research

National

Property type	Price ($)	Weekly Change	Monthly Change %	Annual % change
All Houses	950,234	1.106	0.3%	8.1%
All Units	560,961	-1.236	-0.7%	7.8%
Combined	866,487	0.602	0.2%	7.9%

Source: SQM Research

Cap City Average

Property type	Price ($)	Weekly Change	Monthly Change %	Annual % change
All Houses	1,403,699	-11.276	-0.1%	7.8%
All Units	702,415	-0.759	-1.2%	7.6%
Combined	1,196,138	-8.163	-0.3%	7.5%

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 holds below 70% for 11th consecutive week

The preliminary auction clearance rate came in at 65.3% last week, up slightly from the week prior (64.1% which was revised down to 57.3% on final figures) but below the spring season average to date of 66.7% and the eleventh week in a row where the early success rate has been below the 70% mark.

2,577 auctions were held last week, down from 2,898 the week prior.

The volume of auctions looks set to rise this week, with around 2,750 auction campaigns currently being tracked by CoreLogic.

Melbourne was the only market to hold more than 1,000 auctions last week, with 1,111 homes taken under the hammer.

Melbourne returned a preliminary clearance rate of 65.2%, up from the previous week’s 64.9% (revised down to 56.9% on
final numbers).

The average preliminary clearance rate through the spring season to date has been 66.2%.

For the first time in four weeks, the volume of auctions in Sydney has dropped below the 1,000 mark, with 984 auctions held across the city.

The preliminary clearance rate came in at 68.4%, up 5 percentage points from the previous week’s 63.4% early clearance rate, which was revised down to 57.9%.

Across the smaller cities, Brisbane held the most auctions, with 233 homes going under the hammer, the city’s second-highest volume of auctions so far this year (after the week leading into the Easter long weekend).

Brisbane returned a 56.8% preliminary clearance rate, up slightly from 56.3% a week earlier.

143 auctions were held across Adelaide with a preliminary clearance rate of 66.3%, the lowest early success rate so far this
year.

91 auctions were held in Canberra with a 52.7% preliminary clearance rate.

In Perth, six auction results have been collected so far with four reported as successful (66.7%).

There were no auctions in Tasmania last week.

Our rental markets

National rents rose by 0.2% in October, a subtle bounce back from the weaker growth over the previous three months, but less than a third of the 0.7% monthly rise recorded in October of the past three years.

Annual rental growth has dropped to 5.8%, the smallest annual rise in the national rental index since the 12 months ending April 2021.

With rents a significant component in the CPI calculation, the slowdown in rental growth is a positive signal for inflation, as CPI-rent data has dropped to 6.7% in Q3 2024 from a high of 7.8% in Q1.

The easing in rental demand correlates with a slowdown in net overseas migration and an increase in average household sizes as the effects of the pandemic ‘shrink’ trend wear off.