Key takeaways
CoreLogic estimates the combined value of residential real estate rose to $11.1 trillion at the end of October.
National home values rose by 0.9% over the October quarter.
Home value growth continues to be skewed to the more affordable end of the market with the most affordable 25% of Adelaide (5.5%), Perth (5.5%) and Brisbane (3.9%) rising the fastest. Meanwhile, home values in Darwin's (-2.1%), Melbourne's (-1.2%), Sydney's (-0.9%) upper quartile market has seen some of the largest declines over the quarter.
CoreLogic estimates there were 43,232 sales in October, taking the annual count to 522,401 occurred in the 12 months to October, down from 524,999 in the year to September.
Days on market has increased to 33 days in the three months to October, up from 27 days this time last year. Most capitals are now recording longer days on market compared to this time last year, with rising advertised stock levels providing more choice and less urgency for buyers.
Vendors are now offering slightly lower discounts on their properties compared to last year, with the median level vendor discounting rate coming in at-3.6% nationally over the October quarter.
New listings totalled 45,155, 1.3% higher than the same time last year and 0.8% above the historic five-year average.
Total listings have continued to trend higher over spring, with the recent flow of new stock taking total listings to 155,875 in the four weeks to 3 November 2024. Although inventory levels are more diverse across the capitals.
Rental growth continued to slow nationally at 5.8% annually, the slowest annual change since April 2021.
Want to know what's happening to the housing markets around Australia?
Well... this monthly collection of charts from CoreLogic paints an interesting picture.
Their November ‘Chart of the Month’ looks at vacancy rates compared with the pre-COVID five-year average across Australia's capital cities and regional markets.
With rental values rising just 0.2% in October, national vacancy rates have increased to 1.8%, up 40 basis points from the series trough of 1.4% recorded this time last year.
CoreLogic Economist Kaytlin Ezzy noted although vacancy rates are rising, they remain 1.5 percentage points below the pre-COVID five-year average.
While low, this is an improvement from last year, signalling a loosening rental market amid affordability constrains and easing demand.
She further said:
"Rental growth has eased significantly from the height of the rental crisis. At the national level, annual rental growth peaked at 9.6% two years ago and has since eased to 5.8%."
Ms Ezzy says there are several factors that have influenced this slowdown in rental growth:
"On the demand side, we have moved past the peak in net overseas migration in the March quarter of last year, which typically feeds directly into additional rental demand.
Additionally, household formation has recently shifted, reversing the COVID trend of smaller households.
Over the pandemic, the average household size shrunk from approximately 2.6 to 2.5, adding demand for around 120,000 homes nationally. More recently, this trend has reversed, with more renters forming larger households or share houses to help alleviate rental costs, easing the upward pressure on rents.
On the supply side, we've also seen the value of new investor financing trend higher through much of 2023 and 2024.
The value of monthly investor commitments rose 29.5% over the year to September, with investors changing capital gains.
In September, investors made up 38.3% of all new financing, well above the 33.8% decade-average, suggesting this uptick has likely helped alleviate some supply-side measures by delivering additional rental stock."
Looking across the capitals, vacancy rate rises were recorded across all cities, except for Hobart compared to this time last year.
Ms Ezzy explained:
"Rates in both Brisbane (2.1%) and Adelaide (1.1%) have risen by 60 basis points over the year, while Melbourne (1.5%), Sydney (2.2%), Perth (1.2%) and Canberra (2.4%) are all up compared to 12 months ago.
Despite recent increases, Perth's current vacancy rate of 1.2% remains -4.6 percentage points below the pre-covid average of 5.8%, suggesting ongoing rental shortages across the city.
This aligns with Perth recording some of the strongest rent increases across the country, with rental values up 9.6% over the past year
At the other end of the scale is Canberra, where rental growth has been much more subdued throughout the cycle.
While rental caps have helped keep a lid on rent growth, the stronger flow of medium and high-density development over the past five years has helped Canberra’s vacancy rates remain at or above historic averages."
Looking forward, Ms Ezzy anticipates we'll likely see vacancy rates continue to lift as affordability pressures put further downward pressure on rental growth.
Residential real estate underpins Australia's wealth
- The total value of Australian residential real estate was $ 11.1 trillion at the end of October 2024.
- However, outstanding mortgages against all residential housing are only $2.3 trillion - a very comfortable 22% Loan to Value ratio.
- 56.3% of total Aussie household wealth is held in residential property - one of the many reasons neither the banks, the government nor the RBA wants a property crash.
Annual pace of growth continues to slow
- The quarterly change in national home values held at 0.9% over the three months to October, but less than half the recent peak recorded in April (2.2%).
- The annual pace of growth slowed for the eighth consecutive month, with values up 6.0% over the year to October. This is the lowest annual rise since the 12 months to October 2023 (6.0%).
- On a quarterly basis, capital city dwelling values (0.8%) are rising slower than regional values (1.1%). However, the pace of growth has eased in both markets after peaking at 2.2% and 2.3%, respectively, over the three months to April.
- However, our property markets are fragmented meaning while many segments are growing, some are still languishing.
Our capital city markets are fragmented
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.
Each State is running its own race
- On the one hand, Perth property values are up 22.6% over the year and are now at a record high.
- On the other hand, Melbourne property values, declined -0.2% over the last month, also fell -1.9% over the last year, and are now -5.1% below the record high, which was in March 2022.
- And in the previous darling of the housing markets, Hobart, house prices are -11.9 % below their record highs recorded in March 2022.
Another star performer was Brisbane where property values increased 13% over the last year and are currently at a record high.
Sydney property values underperformed over the past year (+3.7%) and are now -0.1% below the record high which was September 2024.
Here's how the Adelaide property market performed.
The Canberra housing market languished last year
Similarly, the Darwin housing market underperformed in the last year.
Here's how many properties are for sale at the moment
- The spring selling season has continued to ramp up, with 45,155 newly advertised listings counted over the four weeks to November 3rd.
- This is 1.3% higher than the flow of new listings seen this time last year and is 0.8% above the historic five-year average.
- At the national level, there were 155,875 total listings observed over the four weeks to November 3rd, 2024.
- The problem is that very few are A Grade homes or investment grade properties. Owners of quality properties are still holding onto them.
- Total listings levels have continued to trend higher over spring, as the above-average flow of new listings amid weakening demand sees stock accumulate.
- However, despite the uplift, total listings nationally remain -9.3% below the historical average for this time of year.
Transaction volumes appear to have moved past peak
- CoreLogic estimates there were 43,232 sales nationally in October, taking the annual count to 522,401.
- Over the quarter, sales activity was estimated to be 0.6% above the average for this time of year, with capital city activity up 4.6% while sales in the regions were -5.9% below average.
We've moved into a more balanced market
- Selling times continued to tick higher over the three months to October, with the national median time on the market coming in at 33 days, up from 27 days this time last year.
- With the exception of Adelaide (26 days) and Darwin (54 days), most capitals are now recording longer days on market compared to this time last year, with rising advertised stock levels providing more choice and less urgency for buyers.
Vendor Discounting
- At the median level, vendors are now offering slightly lower discounts on their properties compared to last year.
- The median vendor discount nationally was -3.6% in the three months to October, down slightly from the -3.7% median discount seen at the same time last year.
Auction activity ramps up
- Auction activity continued to ramp up over October, with the weekly auction count exceeding the 3,000 mark for the second time this year over the week ending 27th October (3,135).
- The rise in auction numbers was accompanied by a continued easing in the capital city clearance rate, with the final rate averaging 59.5% over the four weeks to October 27th, down from 61.8% over the four weeks to September 29th.
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We update the weekly auction clearance results here each week.
We're experiencing a rental market crisis in Australia
- Rental growth continued to slow nationally, with rents up 5.8% over the 12 months to October – the slowest annual change since the 12 months to April 2021.
- Over the quarter, capital city rents were flat (0.0%), while regional rental values rose 0.5% over the three months to October.
- However vacancy rates around Australia remain low.
- In October, national gross rent yields remained steady for the 23rd consecutive month at 3.7%.
- However, the easing in rent growth amid multi-speed value growth conditions has resulted in a change of guard.
- For the first time on record, Brisbane and Adelaide recorded a lower yield than Melbourne, with Melbourne’s yield rising to 3.68%, while yields in Brisbane and Adelaide fell to 3.65%.
Dwelling approvals and housing credit
- National house approvals continued to trend higher in September, up 2.4% over the month and 5.9% over the quarter.
- With 9,891 houses approved in September, the monthly national trend exceeded the decade average for the first time since August 2022.
- By contrast, unit approvals rose 8.4% over the months but remained -31.1% below the previous decade average.
Finance and Lending
- After rising for seven consecutive months, the value of new home lending fell -0.3% in September to $30.2 billion.
- Both investor (-1.0%) and first home buyer (-3.3%) financing declined over the month, while owner-occupier lending rose by just 0.1%.
- The value of first home buyer finance fell -3.3% in September to $5.2 billion.
- First-home buyers comprised 28.0% of the value of owner-occupied lending, down from a recent peak of 30.0% in April but well above the historic decade average of 24.9%.
Source of charts: CoreLogic Chart Pack, November 2024.
- Also read:This week’s Australian Property Market Update – Latest Data, State by State November 26th 2024
- Also read:Melbourne property market forecast for 2025
- Also read:Sydney property market forecast for 2025
- Also read:Brisbane’s property market forecast for 2025
- Also read:Everything you need to know about the state of Australia’s property markets in 20 charts – November 2024
