Australian Home Values Continue to Rise in April

The Australian property market showed continued growth in April, with the national Home Value Index (HVI) from CoreLogic increasing by 0.6%. This growth rate is consistent with the gains seen in February and March. The rise in home values added approximately $4,720 to the national median dwelling value.

An Ongoing Growth Cycle

April’s increase marks the 15th month of growth in the current cycle, with housing values up 11.1% or around $78,000 since January of last year.

Varying Conditions Across Cities

While the overall market is experiencing growth, there are different conditions across cities. The mid-sized capitals are leading the pace of growth, with Perth seeing a 2.0% rise in April, followed by Adelaide at 1.3% and Brisbane at 0.9%. Sydney has held steady with a monthly change of 0.4%, while Melbourne’s market has stabilized after a small dip of -0.8% over the three months to January.

Emerging Growth in Smaller Capitals

The smaller capitals, such as Hobart and ACT, have emerged from relatively soft conditions and have recorded three months of consistent, albeit mild, rises in home values.

Perth’s Strong Housing Market

Perth’s housing market continues to show no signs of slowing down, with a quarterly growth rate of 6.0%. This growth rate is approaching the highs seen during the pandemic when interest rates were at their lowest.

Brisbane’s Affordability Pressures

On the other hand, Brisbane’s pace of growth has eased below the 1% mark for the first time in 12 months, standing at 0.9% in April. Affordability pressures may be impacting the pace of growth in the city, as values have increased by nearly $300,000 since the onset of COVID in March 2020, the largest increase of any capital.

Strong Growth in Lower-Value Markets

Lower-value markets across almost every capital city are experiencing stronger growth conditions. The only exception is Darwin, where housing affordability is less challenging. In Sydney, the lower quartile and middle of the market are showing the same quarterly change at 1.7%, compared to a 0.5% rise in upper quartile dwelling values. Unit values have outpaced house values over the past three months, except in Hobart, where houses recorded a larger gain than units.

Regional Markets Outperforming Capital Cities

Regional markets have shown slightly stronger quarterly growth rates over the past five months compared to their capital city counterparts. This follows a 10-month period where the combined capitals index outperformed regional markets. The strongest regional markets were aligned with the strongest capital cities, with Regional WA leading the way with a 5.3% gain, followed by Regional SA at 3.9% and Regional Queensland at 3.2%. The only rest of state market to record a decline in values over the rolling quarter was Regional Victoria at -0.1%.

Home Sales and Market Sentiment

Home sales appear to have peaked in November of last year. While the monthly trend in home sales is highly seasonal, the less seasonal six-month trend has remained relatively flat since the rate hike in November. Estimated sales over the past three months are tracking 8.6% higher than the same time last year and about 5.1% above the previous five-year average. However, worsening affordability and low sentiment are likely to limit the volume of sales until interest rates start to decrease.

In conclusion, the Australian property market continues to show growth, with different conditions across cities and market segments. The mid-sized capitals are leading the pace of growth, while the smaller capitals have emerged from softer conditions. Perth’s housing market remains strong, while Brisbane is experiencing affordability pressures. Lower-value markets and units have shown stronger growth, and regional markets are outperforming capital cities. Home sales have peaked, and market sentiment remains low.