CoreLogic National housing market update [video] | November 2023

CoreLogic's National Home Value Index rose a further 0.9% in October, accelerating from a 0.7% rise in September.

Since finding a trough in January, the National Home Value Index has increased by 7.6%, leaving the index only 0.5% below its historic high recorded in April of last year.

At this rate of growth, we're likely to see the National Home Value Index reach a new record high midway through November, recovering from the 7.5% drop in values recorded through the downturn between May 2022 and January 2023.

Although housing values are consistently rising across most capital cities, there has been a slowdown in the quarterly pace of growth.

Capital city home values rose 2.6% over the three months to October, down from the 3.7% rise seen over the three months to June, likely driven by a combination of higher advertised stock levels and stretched affordability.

As the flow of new listings coming into the market accelerates, it's unlikely buyer demand will be able to keep pace amid high interest rates and low sentiment.

Dwelling values rose across each of the capital cities, except Darwin through the month, with Perth, Brisbane, and Adelaide as the top-performing markets.

Meanwhile, Sydney, Perth, and Brisbane have all seen dwelling values rise by more than 10% over the first 10 months of the year.

Brisbane housing values posted a nominal recovery in October, erasing the previous 8.9% drop in values to reach a new record high.

Perth and Adelaide are also at new record highs after recovering from the shallower downturns earlier this year.

Across the other capitals, Sydney values remain 2.2% below their January 2022 peak and Melbourne values are 3.7% below their March 2022 peak.

Hobart housing values are down the most from their recent highs, remaining 11.6% below peak levels.

Regional markets continue to lag their capital city counterparts, with the combined regional index up 0.7% in October, compared with the 0.9% rise across the combined capitals.

This trend of higher growth in the capital cities was evident across every state.

Despite the slower pace of growth, every rest of the state region did record a rise in housing values over the month, except regional Tasmania, where housing values were flat.

Similar to the trend in the capitals, regional Queensland, Western Australia, and South Australia are all showing stronger conditions with each of these broad regions at record highs in October.

The trend in advertised stock levels remains a critical feature of the housing market.

After 10 months of below-average vendor activity, the flow of new capital city listings has ramped up through winter and spring to be almost 12% higher than a year ago.

Although total listings remain lower than this time last year, and below the previous five-year average, it's clear that inventory levels are rising.

Capital city stock on the market is up 5.1% since the start of spring, in a clear indication that buyer demand isn't keeping pace with the flow of new listings.

However, the balance of advertised supply remains diverse around the country.

At one end of the spectrum is Perth, where advertised stock levels have fallen through spring to be 2.1% below levels recorded at the end of winter.

Additionally, listing numbers have hardly budged in Brisbane and Adelaide.

At the other end of the spectrum is the ACT, where total listings have jumped 21.3% through spring to date.

Listings are also up 10.7% across Melbourne and 9.3% higher across Sydney, while Hobart listings have been well above average for more than a year.

While vendor activity has picked up, home sales are tracking only slightly above the five-year average across the capitals and are losing some momentum.

Regional sales are holding reasonably steady but at slightly below-average levels.

With vendor activity gathering some momentum, while buyer activity slows, it's likely selling conditions will continue to rebalance back towards buyers, especially in those cities where advertised supply levels are high.

In markets where demand and advertised supply levels are more evenly balanced, it's logical to expect price growth to slow down.

In other markets, such as Perth, where listings are almost 45% below the five-year average, while sales activity is almost 25% above average, prices are rising at the fastest pace since March 2021.

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About Tim Lawless Tim heads up the Core Logic RP Data research and analytics team, analysing real estate markets, demographics and economic trends across Australia. Visit www.corelogic.com.au