Property growth refuses to slow after another strong April

We're now four months into 2024 and the monthly rate of national growth is unwavering, lifting Australian property prices higher once again. 

Records are still being broken each month, but will the latest concerns about interest rate cut delays throw a spanner in the works? 

Here's all the latest on how Australian property is performing and where the market could be heading next.

National property prices: April 2024

Australia's median home price rose +0.6 per cent in April for the third consecutive month according to CoreLogic's latest report.

That brings total gains for the year so far to a healthy +2.2 per cent. 

Sydney remained steady with another +0.4 per cent increase and Melbourne continued to hover around flat levels. 

Brisbane eased back slightly to +0.9 per cent growth for the month while Adelaide delivered another strong +1.3 per cent uptick. Perth showed no signs of weakening with a huge +2.0 per cent jump. 

Smaller cities Hobart, Darwin and Canberra all remained in positive territory, with Darwin getting the biggest bump of +0.6 per cent over April. 

Regional markets forged ahead and overtook the capitals with an overall +0.8 per cent increase. 

CoreLogic's report noted that "April’s increase takes the current growth cycle into its 15th month, with housing values up +11.1 per cent or approximately $78,000 since the trough in January last year."

Three key takeaways from the current market

2024 has been a year of consistency so far and a number of widespread trends have been clearly established. 

Our multi-speed markets are splintering further

Throughout the 2021 property boom, there was a degree of unity between Australia's various city and regional markets. A very different dynamic has cemented itself in 2024. 

After a strong start in 2023, Sydney and Melbourne both look to have plateaued somewhat, while the country's mid-sized cities of Brisbane, Adelaide and Perth are still seeing very significant monthly gains. 

CoreLogic's research director Tim Lawless said "We aren’t seeing any signs of heat coming out of the Perth housing market just yet, in fact the quarterly pace of growth, at 6.0 per cent, is approaching the cyclical highs seen during the pandemic when interest rates were at rock bottom.

"On the other hand, we are seeing the pace of gains slow across the Brisbane market, easing below the 1% mark to 0.9% in April for the first time in 12 months. 

"Affordability pressures may be impacting the pace of growth across the city, following a nearly $300,000 increase in values since the onset of COVID in March 2020, the largest dollar value increase of any capital."

Units are outpacing houses as buyers seek affordability

On the topic of affordability, CoreLogic has seen demand move towards the more accessible end of the market as high interest rates and cost-of-living pressures put the squeeze on buyers. 

The lower quartile of the market (ie. the least expensive 25 per cent of sold properties) saw four times the growth of the upper quartile in the first quarter of 2024, suggesting affordability is a major factor for buyers. 

"The shift towards stronger conditions across lower value markets can also be seen between the housing types, with growth in unit values outpacing house values over the past three months," Mr Lawless said. 

"Hobart was the only city where houses recorded a larger gain than units over the past three months."

Supply is still falling well short of demand

Although the high-rate environment should be putting downward pressure on property values, a shortage of listings is still a key driver of the upward movement we've seen in 2024. 

CoreLogic's data showed new listings in April were -17.6 per cent below the five-year average, indicating a broadly undersupplied market. 

Demand, meanwhile, was up over the same period. Home sales in April sat +2.4 per cent higher than the five-year average. 

The effect has been that properties are selling at a more rapid pace than usual. Days on market across the capital cities sat at a median of 27 compared to the five-year average of 30.7. 

Mr Lawless highlighted that "In the hottest market, Perth, homes are selling in a median of just 10 days and discounting rates are averaging just -2.4 per cent."

What's next for Australian property?

There has been remarkable consistency across most markets as supply continues to lag behind demand. 

CoreLogic called the widespread undersupply a "national crisis," the combination of high construction costs and tight labour markets mean it's unlikely the number of new builds on the horizon will be able to meet demand in the short term. 

But, their report suggested that "Eventually housing demand and supply will converge, driven by slowing population growth and, at some stage, a ramp up in residential construction activity."

For now, all eyes will be on the RBA and inflation data over the coming months as expectations shift around the movement of interest rates.

CoreLogic's report stated, "The 1.0 per cent rise in inflation through the March quarter has seen many economists, as well as financial markets, push their forecasted timing for rate cuts back, and reignited some speculation that interest rates could rise again."

Maintaining or even hiking rates while affordability is a broad-based issue could serve to take some heat out of the market, although there are still some strong upsides. 

"Despite the worsening risk profile, housing values are likely to be propped up by the mismatch between housing supply and demand; a situation that doesn’t look like it will change in the near future," the report concluded.