Perth 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.

The pace of growth in Perth housing values continues to accelerate, with October's 1.6% rise in values the highest monthly gain since March of 2021.

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.

Home sales are tracking almost 25% above the previous 5-year average, while listings are close to 45% below the 5-year average.

Such a disconnect between available supply and demonstrated demand has led to homes selling in a median of just 13 days amid market conditions that are well and truly skewed toward sellers.

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.

At the same time, rental vacancy rates have fallen to just half a percent across Perth, reflecting an extremely low housing supply from both a purchasing and a rental respectively.

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

You may also want to read:

National Housing Market Update [Video] 

Adelaide Housing Market Update [Video]

Sydney Housing Market Update [Video]

Brisbane Housing Market Update [Video]

Melbourne Housing Market Update [Video]

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