By Michael Yardney October 7, 2024

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This week’s Australian Property Market Update – Latest Data, State by State October 8th 2024

Property Market News
This week’s Australian Property Market Update – Latest Data, State by State October 8th 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.

There were 1,913 auctions held across the combined capitals last week, up from 1,836 over the previous week.

Based on results collected so far, the combined capitals auction clearance rate has continued to fade, falling to 63.9% .

This week, CoreLogic Research reports that:

Sydney property prices remained flat over the last week, increased 0.3% over the last month and are 4.4% higher than they were 12 months ago.

Melbourne property prices fell -0.1% over the last week, also fell -0.1% over the last month, and are -1.6% lower compared to 12 months ago.

Brisbane property prices increased by 0.2% over the last week, increased 0.8% over the last month and are 14.4% higher than they were 12 months ago.

Overall, Australian capital dwelling prices increased by 0.4% over the last month and are now 6.9% 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.

Despite high interest rates and the rising cost of living, the RBA recently reported that Australian household wealth rose again and a major contributing factor was rising house prices.

Household wealth rose for the seventh consecutive quarter (up 1.5 per cent or $250 billion) in June 2024.

Total household wealth was $16.5 trillion in the June quarter, which was 9.3 per cent ($1.4 trillion) higher than a year ago.

This was largely driven by residential land and dwellings, contributing 1.3 percentage points to quarterly growth.

I see the current market offering a window of opportunity for property investors with a long-term focus.

We have what someone would call a "perfect storm" of facors that will lead to strong property markets over the next couple of years:

Continuing strong population growth
A shortage of skilled labour
A massive shortage of housing
Inflation is coming under control, and will soon be within the Reserve Bank's target range
Interest rates are set to fall

And when interest rates do start to fall, buyer and seller confidence returns... the property cycle will move to the next stage.

On the auction front... there were 1,913 auctions held across the combined capitals last week, up from 1,836 over the previous week.

The lower numbers last week can be attributed to the Labour Day long weekend in NSW, ACT and SA, along with the King’s Birthday long weekend in QLD.

According to CoreLogic, it's the lowest preliminary clearance rate since December 2022

Based on results collected so far, the combined capitals auction clearance rate has continued to fade, falling to 63.9% .

This was the lowest preliminary clearance rate since the week ending December 18th 2022 at 55.8%. The result was down from 64.5% a week earlier (revised to 60.6% once finalised).

See Corelogic's full auction report below.

This week, CoreLogic also reports that:

Sydney property prices remained flat over the last week, increased 0.3% over the last month and are 4.4% higher than they were 12 months ago.
Melbourne property prices fell -0.1% over the last week, also fell -0.1% over the last month, and are -1.6% lower compared to 12 months ago.

Brisbane property prices increased by 0.2% over the last week, increased 0.8% over the last month and are 14.4% higher than they were 12 months ago.

Overall, Australian capital dwelling prices increased by 0.4% over the last month and are now 6.9% higher than they were 12 months ago.

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

Source: CoreLogic October 7th 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 7th 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	1,925,121	12.779	0.4%	3.0%
All Units	826,525	-0.325	1.1%	8.8%
Combined	1,480,701	7.478	0.5%	4.0%

Source: SQM Research

Melbourne

Property type	Price ($)	Weekly Change	Monthly Change %	Annual % change
All Houses	1,243,659	3.841	0.5%	5.0%
All Units	610,573	-0.573	0.1%	3.4%
Combined	1,045,054	2.456	0.4%	4.5%

Source: SQM Research

Brisbane

Property type	Price ($)	Weekly Change	Monthly Change %	Annual % change
All Houses	1,182,306	-0.518	2.0%	18.3%
All Units	660,156	5.544	2.6%	23.0%
Combined	1,051,916	0.996	2.1%	18.8%

Source: SQM Research

Perth

Property type	Price ($)	Weekly Change	Monthly Change %	Annual % change
All Houses	1,073,789	-3.259	1.0%	25.9%
All Units	566,011	3.789	1.8%	23.7%
Combined	941,355	-1.421	1.1%	25.4%

Source: SQM Research

Adelaide

Property type	Price ($)	Weekly Change	Monthly Change %	Annual % change
All Houses	954,668	-0.566	0.9%	20.8%
All Units	467,721	-0.571	0.0%	9.3%
Combined	867,253	-0.567	0.8%	19.6%

Source: SQM Research

Canberra

Property type	Price ($)	Weekly Change	Monthly Change %	Annual % change
All Houses	1,170,254	2.483	-0.5%	8.3%
All Units	597,065	1.434	1.1%	-1.0%
Combined	960,368	2.099	-0.2%	5.6%

Source: SQM Research

Darwin

Property type	Price ($)	Weekly Change	Monthly Change %	Annual % change
All Houses	670,411	-2.523	2.6%	-2.0%
All Units	384,443	0.223	0.6%	2.5%
Combined	558,147	-1.445	2.0%	-0.9%

Source: SQM Research

Hobart

Property type	Price ($)	Weekly Change	Monthly Change %	Annual % change
All Houses	787,667	11.423	-0.4%	-1.1%
All Units	492,888	5.748	0.1%	-0.5%
Combined	743,121	10.565	-0.3%	-1.1%

Source: SQM Research

National

Property type	Price ($)	Weekly Change	Monthly Change %	Annual % change
All Houses	940,235	2.425	0.5%	7.8%
All Units	565,497	2.226	1.6%	10.0%
Combined	859,770	2.382	0.7%	8.0%

Source: SQM Research

Cap City Average

Property type	Price ($)	Weekly Change	Monthly Change %	Annual % change
All Houses	1,401,839	4.984	0.8%	8.3%
All Units	699,510	-1.198	1.3%	9.1%
Combined	1,194,425	3.158	0.9%	8.2%

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

Lowest preliminary clearance rate since December 2022

The combined capitals auction clearance rate has continued to fade, falling to 63.9% based on preliminary numbers.

This was the lowest preliminary clearance rate since the week ending December 18th 2022 at 55.8%.

The result was down from 64.5% a week earlier (revised to 60.6% once finalised).

A low preliminary clearance rate in Sydney was the main drag on the capital city's headline result.

62.7% of auctions were successful so far, down from 66.1% over the previous week (revised down to 60.9%) and the lowest early result since the week ending December 18th 2022 (57.6%).

Sydney also recorded a sharp drop in auction volume, with only 524 homes going under the hammer as the market took a breather for the Labour Day long weekend.

64.4% of Melbourne auctions were successful last week, a step up from the 56.7% of auctions that cleared a week earlier (revised higher to 57.0%), but still the fourth lowest preliminary clearance rate so far this year.

The volume of auctions rose to 1,059 after dropping sharply over the previous week due to the grand final long weekend.

Across the smaller capitals, Brisbane hosted the most auctions, with 152 homes taken to market, returning a preliminary clearance rate of 61.0%, up from 55.0% the week prior (revised down to 51.9%).

129 auctions were held in Adelaide, with a preliminary clearance rate of 70.6%, the third-lowest early result so far this year.

38 auctions were held in Canberra, returning a preliminary clearance rate of 51.6%.

Perth held 10 auctions with 85.7% returning a successful result so far and only one auction was held in Tasmania.

The number of auctions is set to rise to around 2,600 this week, with more than 1,000 auctions currently scheduled for both Sydney and Melbourne.

Our rental markets

he 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.