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November 15, 2024

Australian Property Market Update: Latest Data by State – November 12, 2024

Our property markets continue to rise in value, though at a steadier pace than earlier this year.

CoreLogic estimates that the combined value of residential real estate has reached a trillion-dollar market, hitting $11 trillion by the end of September. I remember the excitement when it previously hit $9 trillion before the pandemic.

Last week, 2,820 auctions were held—the second-highest volume recorded in the spring season so far, and the fifth-highest volume of auctions for 2024. The preliminary auction clearance rate reached 65.8% across the combined capitals.

CoreLogic Research reports this week show varied market trends across cities:

Sydney’s property prices held steady over the past week, dipped by 0.1% in the last month, and are now 3.5% higher than 12 months ago.
Melbourne saw property prices fall by -0.1% over the last week and 0.2% over the month, and they’re now -2.2% lower than a year ago.
Brisbane’s property prices increased by 0.1% over the last week and 0.6% over the past month, bringing them 12.9% higher than 12 months ago.

In aggregate, Australian capital dwelling prices have increased by 0.2% over the last month and stand 6% higher than a year ago. Looking ahead, property prices and rents are expected to continue on an upward trajectory throughout 2024.

This property cycle is currently driven by an undersupply of good properties relative to current demand, fueling both increasing property values and rental increases. Experts agree that the persisting undersupply won’t be resolved soon, as the housing construction targets necessary to meet demand remain out of reach. For now, exciting growth and positive capital growth signal a strong market with promising prospects.

The number of private property investors in Australia is dwindling, with recent figures revealing a significant drop. This decline is expected to worsen the rental shortage, driving up rents even further.
Factors like rising interest rates, regulatory pressures, increased taxes, and high compliance costs are prompting many investors to sell or halt new investments. Victoria has been especially impacted due to higher land taxes and stricter tenancy regulations.

For decades, private investors have supplied over 90% of Australia’s rental housing, but their diminishing presence now poses a real threat to an already strained market. The number of property investors fell to 2.29 million in 2021-22 from a peak of 2.39 million in 2019-20. With fewer private investors, rental properties are now in short supply, vacancy rates have plummeted to below 1% in some areas, and rents are on the rise.

To bring investors back into the market, I believe we need stability in policy, along with reduced regulatory and tax burdens and new incentives for rental property investment. These changes would help restore investor confidence and relieve pressure on the rental supply.

Without meaningful policy shifts that support private investors, Australia’s rental crisis will only deepen. Encouraging private investment is essential for building a resilient, balanced rental market capable of providing long-term, affordable housing for all Australians.

On the auction front, a high volume of 2,820 auctions were held last week, marking the second-highest count of the spring season and the fifth-highest for 2024 to date. The preliminary auction clearance rate reached 65.8% across the combined capitals, as noted in the latest CoreLogic report.

CoreLogic also highlights seasonal trends in property prices this week:

Sydney shows stability, with property prices remaining flat over the last week, down -0.1% for the month, but still higher than 12 months ago by 3.5%.
Melbourne saw a slight dip, with property prices falling -0.1% over the week, down -0.2% over the month, and currently 2.2% lower than a year ago.
Brisbane demonstrated notable growth, with property prices increasing by 0.1% over the week, up 0.6% over the month, and 12.9% higher than 12 months ago.

Overall, Australian capital dwelling prices increased by 0.2% over the past month, standing 6% higher than a year ago. The property cycle is driving market movement, but fragmented markets across the capital continue to show distinct patterns of capital growth and dwelling price shifts.

These are overall figures, as there isn’t just one single Sydney, Melbourne, or Brisbane property market. Various segments within each capital city are performing differently, with distinct trends across different market segments. At the start of this cycle, the upper quartile helped lead the upswing; however, the lower quartile has now recorded a stronger outcome in housing values compared to its upper quartile counterpart over the past quarter. The chart analysis below highlights how various segments of each capital city market are performing differently, with median-priced properties showing solid market performance.

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	1,949,999	12.901	1.4%	4.5%
All Units	835,684	-5.284	-0.3%	7.1%
Combined	1,498,411	5.148	1.0%	4.7%

Melbourne

Property type	Price ($)	Weekly Change	Monthly Change %	Annual % change
All Houses	1,249,865	-0.465	0.4%	3.3%
All Units	612,873	-1.585	0.1%	3.0%
Combined	1,049,674	-0.991	0.3%	3.0%

Brisbane

Property type	Price ($)	Weekly Change	Monthly Change %	Annual % change
All Houses	1,182,356	-1.084	0.2%	16.8%
All Units	668,027	1.423	0.8%	23.2%
Combined	1,053,738	-0.544	0.2%	17.6%

Perth

Property type	Price ($)	Weekly Change	Monthly Change %	Annual % change
All Houses	1,086,352	9.997	1.5%	25.4%
All Units	579,731	2.199	2.4%	27.2%
Combined	954,039	7.875	1.6%	25.6%

Adelaide

Property type	Price ($)	Weekly Change	Monthly Change %	Annual % change
All Houses	946,363	-3.163	-0.9%	15.9%
All Units	473,203	1.092	1.8%	8.0%
Combined	861,376	-2.417	-0.6%	15.1%

Canberra

Property type	Price ($)	Weekly Change	Monthly Change %	Annual % change
All Houses	1,178,362	-1.500	1.0%	3.4%
All Units	599,488	0.637	0.5%	0.2%
Combined	965,524	-1.150	-0.8%	2.2%

Darwin

Property type	Price ($)	Weekly Change	Monthly Change %	Annual % change
All Houses	687,272	1.758	2.6%	-0.3%
All Units	383,138	-1.472	-0.4%	1.6%
Combined	567,906	0.502	1.8%	0.1%

Hobart

Property type	Price ($)	Weekly Change	Monthly Change %	Annual % change
All Houses	805,052	5.857	1.0%	1.6%
All Units	476,314	0.504	-1.8%	-9.3%
Combined	755,277	4.999	0.8%	0.4%

National

Property type	Price ($)	Weekly Change	Monthly Change %	Annual % change
All Houses	952,602	7.664	0.9%	8.3%
All Units	562,507	-2.266	-0.5%	8.3%
Combined	868,678	5.364	0.7%	8.2%

Cap City Average

Property type	Price ($)	Weekly Change	Monthly Change %	Annual % change
All Houses	1,413,652	9.837	1.3%	8.2%
All Units	703,503	-4.505	-1.0%	8.0%
Combined	1,203,467	5.372	0.9%	7.9%

The value of property asking prices as a leading indicator in housing markets is quite significant.

Unlike median prices, which can sometimes misrepresent actual trends, asking prices offer a closer look into market sentiment, acting as a real-time indicator of seller expectations.

Early Market Sentiment Indicator: Asking prices reveal the confidence levels of sellers at any given time. When sellers are optimistic, they often set higher asking prices, expecting strong buyer interest. On the other hand, if they anticipate a downturn, they may lower prices to attract potential buyers. This makes asking prices an effective real-time indicator, frequently foreshadowing shifts in transaction prices.
Predictive of Future Price Trends: Asking prices are often predictive of future price trends. For example, a consistent upward trend in asking prices may hint at a future rise in transaction prices.
Impact of Economic Factors: Economic factors such as interest rates, employment levels, and overall economic stability also play into asking prices. Changes in policies by the Reserve Bank of Australia or shifts in the job market can swiftly reflect in asking prices, offering insights into how these broader economic factors influence the housing market.
Regional Variations: In Australia’s diverse market, asking prices also reveal regional trends. For example, the dynamics in Melbourne and Sydney may differ from those in Brisbane or Perth. Asking prices provide early indications of such regional variations.
Influence of Supply and Demand: Asking prices respond directly to supply and demand. In regions with limited supply and high demand, asking prices generally rise, whereas an oversupply may lower them.

While asking prices offer valuable early indications and insights, they are most effective when considered with other market dynamics, including actual sales prices, time on the market, auction clearance rates, and prevailing economic conditions.

Last weekend's auction report

With 2,820 auctions held last week, it marked the second-highest volume so far in the spring season and the fifth-highest volume of auctions throughout 2024.

The preliminary auction clearance rate reached 65.8% across the combined capitals, which is 2.4 percentage points higher than the previous week yet slightly below the average for spring to date (67.1%).

Melbourne hosted the highest volume of auctions last week, with 1,293 homes going to market, marking the third-highest weekly volume of auctions so far this spring season.

Based on the preliminary collection, 66.5% of auctions achieved a successful result, up from 62.4% the previous week and closely aligning with the spring season average of 66.4%.

Sydney followed with 1,073 auctions held, recording the third-highest volume so far this year and the second-highest for the spring season to date.

The preliminary figures show a positive result for 68.2% of Sydney’s auctions, an increase from 65.5% the prior week and slightly below the spring season average of 68.4%.

Sydney’s auction clearance rate has remained below 70% for six of the past seven weeks.

In the smaller capitals, Brisbane saw the most auctions, with 175 homes going under the hammer, though this marked the lowest weekly volume in five weeks.

So far, 53.2% of Brisbane auctions have been reported as successful, an improvement from 52.3% the week before, but still below the spring-to-date average of 57.4%.

Adelaide recorded 160 auctions, with a strong performance of 70.1% selling.

In the ACT, 94 auctions were held with a preliminary clearance rate of 45.2%, the lowest reported since the early pandemic phase in April 2020.

Perth saw 22 auctions, with 53.8% selling, while Tasmania had just three auctions.
This week, we’re expecting to see over 2,900 auctions held, before scaling back slightly to around 2,550 the following week.

Our rental markets

National rents saw a subtle bounce back in October, rising by 0.2%, which marks a recovery from the weaker growth observed over the previous three months. However, this increase is less than a third of the 0.7% monthly rise seen in October over the past three years.

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

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

The easing in demand aligns with a slowdown in net overseas migration and a rise in average household sizes, as the effects of the pandemic shrink trend begin to wear off.