National home values grew by 0.8% in August, indicating that the housing market’s recovery is accelerating, according to CoreLogic’s latest Home Value Index (HVI) report.
The HVI recorded a successive monthly rise in home values, increasing marginally from July’s 0.7% growth, disrupting a two-month pattern of stagnating capital gains.
Housing market recovery under full swing
The national HVI is up 4.9% after bottoming out in February, increasing median dwelling values by around $34,301.
Summary of dwelling values through the pandemic to date
Geography
Onset of COVID to Cyclical Peak
Cyclical Peak Date
Cyclical Peak to Recent Trough
Recent Trough Date
Recent Trough to Current
Sydney
24.5%
Jan 22
-13.8%
Jan 23
8.8%
Melbourne
10.7%
Feb 22
-9.6%
Feb 23
3.2%
Brisbane
41.8%
Jun 22
-11.0%
Feb 23
6.2%
Adelaide *
44.7%
Jul 22
-2.4%
Mar 23
4.6%
Perth *
24.3%
Jul 22
-0.9%
Feb 23
5.3%
Hobart
37.6%
May 22
-13.0%
Apr 23
0.0%
Darwin
31.1%
Aug 22
-3.3%
Apr 23
2.0%
ACT
38.3%
Jun 22
-9.5%
Apr 23
1.0%
Rest of NSW
47.6%
May 22
-10.3%
Apr 23
0.7%
Rest of Vic.
34.4%
May 22
-9.3%
Aug 23
0.0%
Rest of Qld
42.6%
Jun 22
-7.3%
Feb 23
4.5%
Rest of SA *
56.5%
<at cyclical peak>
Rest of WA
31.2%
<-0.2% from cyclical peak>
Rest of Tas.
51.0%
Jun 22
-7.7%
Mar 23
0.3%
Combined capitals
22.3%
Apr 22
-9.7%
Feb 23
6.0%
Combined regionals
41.6%
Jun 22
-7.7%
Feb 23
1.6%
Australia
26.2%
Apr 22
-9.1%
Feb 23
4.9%
* At record high as at end of August 2023. Source: CoreLogic.
This recovery was recorded across most of Australia, with all capital cities witnessing growth in dwelling values in August except for Hobart, which clocked in a 0.1% monthly decline.
The city with the most considerable value increase was Brisbane, where prices rose by 1.5%, followed by Sydney and Adelaide, where prices increased by 1.1%.
Index results as at 31 August 2023
Month
Quarter
Annual
Total return
Median value
Sydney
1.1%
3.8%
1.2%
4.5%
$1,098,821
Melbourne
0.5%
1.6%
-2.3%
0.9%
$768,216
Brisbane
1.5%
4.2%
-3.0%
1.4%
$747,626
Adelaide
1.1%
3.4%
2.2%
6.2%
$682,642
Perth
0.9%
2.9%
4.5%
9.5%
$607,083
Hobart
-0.1%
-0.5%
-10.0%
-6.0%
$657,487
Darwin
0.8%
1.6%
-1.3%
4.3%
$496,136
Canberra
0.3%
0.5%
-5.9%
-2.2%
$830,875
Combined capitals
1.0%
3.1%
-0.1%
3.6%
$804,152
Combined regional
0.1%
0.8%
-4.0%
0.3%
$588,841
National
0.8%
2.5%
-1.1%
2.8%
$732,886
Source: CoreLogic.
Significant differences remain in housing value trends across Australia
CoreLogic research director, Tim Lawless, opined that, while housing prices were primarily moving upwards, substantial variations across different regions existed.
Change in dwelling values to end of August 2023
Source: CoreLogic.
“Sydney has led the recovery trend to-date with a gain of 8.8% since values found a floor in January this year. Brisbane has also posted a strong recovery with values up 6.2% since bottoming out in February,” he said.
“At the other end of the scale, some other capital cities are better described as flat, with Hobart home values unchanged since stabilising in April, while values across the Australian Capital Territory have risen only mildly, up 1.0% since a trough in April.
“These are also the only two capital cities where advertised supply is tracking higher than a year ago, suggesting a rebalancing between buyers and sellers is a key factor contributing to the stability of values in these regions.”
House values recover quicker than unit values
House values have been recovering much faster than unit values in the capital cities. Combined capital city house values climbed by 6.3% after bottoming out in February, while unit values rose by 4.9%.
It is crucial to note that house values fell much more steeply during the previous downturn — they fell by 10.7% compared to the 6.5% decline in unit values.
“Most cities are showing a larger rise in house values compared with units, however, Sydney stands out with the most significant difference through the recovery cycle to-date, possibly due to the more substantial decline in house values which fell by 15.0% through the recent downturn,” said Lawless.
Fluctuations in regional housing market performance
There were notable differences observed in dwelling value trends between regional housing markets. Regional New South Wales and Victoria values decreased by 0.2% and 0.6% respectively.
Regional Queensland and South Australia’s dwelling values increased by 0.8% and 0.9% respectively.
Meanwhile, regional Western Australia and Tasmania values were largely stagnant, with 0.1% and 0.0% growth.
“With internal migration trends normalising across regional Australia, and less demand side pressures from net overseas migration than in capital cities, regional markets generally aren’t seeing the same level of recovery,” Lawless said.
“Historic migration data from the Australian Bureau of Statistics (ABS) shows that prior to the pandemic, regional Australia had only accounted for around 15% of total net overseas migration.
“Housing values across the combined regional areas of Australia are up 1.6% since a trough in February, compared with a larger 6.0% rise in values across the combined capitals.”
Gold Coast and Sunshine Coast lead the pack for regional areas
In terms of regional Statistical Area 3 (SA3) markets, seven of the top 10 markets for the highest capital gains over the three months ending in August belonged to areas within the Sunshine Coast and Gold Coast.
“Coolangatta home values surged 6.2% over the past three months, followed by the Sunshine Coast Hinterland (5.8%) and Gold Coast North (5.6%). Strong internal migration into these areas is likely to be a key factor supporting housing demand and housing values in these areas,” Lawless added.
Article source: thepropertytribune.com.au