CoreLogic National housing market update [video]
2023 is ending with increasingly diverse housing conditions.
While our national Home Value Index reached a nominal recovery in November, the market from city to city and region to region is moving at very different speeds.
The 0.6% rise in the national index in November was the smallest monthly gain since the growth cycle commenced in February, however, it was enough to push the index to new record highs.
Following a 7.5% drop in values between the April 2022 peak and January 2023 trough, we’ve seen an 8.3% rise in values through to the end of November.
Overall it took 9 months for the market to find a way through the downturn, and 10 months to recover the losses, providing a ‘V’ shaped recovery in national home values.
Multi-speed conditions have become increasingly evident across the capitals, with three cities recording a decline in values over the month.
These were Melbourne and Hobart both down 0.1% and Darwin down 0.3%.
Growth in Sydney home values also slowed sharply, reducing to just 0.3%, the smallest monthly gain through the recovery cycle to date.
Sydney home values slipped into negative growth over the last week of the month, hinting that we could see Sydney follow Melbourne’s lead, stabilising or moving into negative growth territory in December.
On the flip side, Perth housing values accelerated into November, posting the largest monthly gains since March 2021 at 1.9%.
Brisbane housing values were up 1.3% and Adelaide values rose by 1.2%.
Housing values in these three cities are all at record highs and continue to show remarkably low levels of advertised supply while purchasing activity is holding at above-average levels.
The Melbourne Cup day rate hike has clearly taken some heat out of the market, but other factors like rising advertised stock levels, worsening affordability, and persistently low consumer sentiment are also acting as a drag on value growth.
Outside of the capitals, the gap between regional and capital city growth rates has converged, with both the combined capitals and the combined regional index recording a 0.6% rise in values in November.
The convergence comes after regional markets have lagged their capital city counterparts through the recovery phase to date.
While housing values across both of these broad regions found a flaw in January, the combined capitals index has since increased by more than double the combined regionals index, up 9.6% and 4.3% respectively to the end of November.
The rise in advertised stock levels has played a key role in slowing housing market conditions in some cities.
Vendor activity started to rise through early winter, which is seasonally unusual, following an extended period where new listings consistently tracked at below-average levels.
The persistent lift in selling activity since June has coincided with slower growth in home values.
Total stock levels have been rising since July, indicating that purchasing demand isn’t quite keeping pace with the rise in vendor activity.
Over the four weeks ending November 26th, advertised stock levels were above the previous five-year average in Hobart, Canberra, Melbourne, and Sydney.
In these cities, market conditions are now in favour of buyers, as higher stock levels provide more choice, less urgency, and greater opportunities to negotiate.
The same can’t be said for Perth, Brisbane, and Adelaide, where advertised stock levels remain remarkably low.
Perth listings are nearly 40% below their five-year average for this time of the year, while listings are more than 30% below average in Brisbane and Adelaide.
Unsurprisingly, these cities are continuing to show a consistently high rate of growth amid strong selling conditions.
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