Key Takeaways

• The value of residential real estate in Australia was estimated to be $10.3 trillion at the end of December, remaining steady compared to the previous month.

Growth in Dwelling Market

• Both the combined capital city dwelling market and the regional dwelling market experienced a rise of 1.5% in the December quarter.

• While the growth trajectory for housing values across the combined capitals has slowed since late May, the pace of growth remained relatively steady in the four weeks ending January 10th.

• Perth led the capital growth performance in the greater capital city markets, with home values increasing by 15.2% in the 2023 calendar year. Perth dwellings also had the strongest quarterly growth among the capital city dwelling markets, rising by 5.1%.

Sales and Selling Time

• In 2023, there were an estimated 488,898 home sales nationally, which is a slight decrease of -2.8% compared to 2022. However, sales are now trending slightly higher than the five-year average.

• The median time it takes to sell a capital city home was trending lower throughout 2023 but slightly increased in the December quarter to 29 days. The median selling time for regional Australian dwellings is 41 days, which is up from 36 days a year ago but still below the pre-COVID average.

Discounting Rates and Clearance Rates

• As selling times reduced, discounting rates also narrowed in 2023. Across the capital cities, the median vendor discount decreased from -4.3% in the December 2022 quarter to -3.5% in the December quarter of last year. However, there was a slight deterioration in the median vendor discount towards the end of the year.

• The final clearance rate across the combined capital cities market trended lower at the end of 2023. In the four weeks ending December 17th, the average final clearance rate was 58.9%, down from 62.5% at the end of November but still higher than the 55.1% average recorded in the same period of 2022.

Rental Market

• Rent values in Australia increased by a further 0.6% in the month of December, bringing the national annual increase to 8.3%. The annual growth in rent values has slightly accelerated compared to the 8.1% increase recorded in the 12 months leading up to October.

Dwelling Approvals

• Dwelling approvals increased by 1.6% in November, driven by a 7.2% increase in the more volatile unit segment. While approvals trended slightly higher over 2023, they remain relatively low overall. The monthly average for dwelling approvals over the past six months has been 13,760, which is below the decade average of 17,254.

In conclusion, the residential real estate market in Australia remained steady at the end of December, with growth in both the capital city and regional dwelling markets. While the growth trajectory has slowed, Perth has shown strong performance in home values. Sales and selling times have seen slight fluctuations, with discounting rates narrowing and clearance rates trending lower. Rent values continue to increase, and dwelling approvals have shown a slight upward trend. Overall, the Australian property market continues to offer opportunities for those looking to buy properties in Australia. ^1^