Australian property market rankings get a shake up in August

It's been a varied winter for Australia's housing markets with some remaining red-hot while others have seen a more typical mid-year lull. 

The variance has led to a changing of the guard when it comes to our most expensive markets. So who's come out on top? 

Find out how our markets stacked up in August and what's ahead for this year's spring selling season.

Australian property prices: August 2024

August's national median price increase of +0.5 per cent was the 19th consecutive month that Australian home values have risen according to CoreLogic's latest report. 

It was also the first time that the country's overall median dwelling price exceeded $800,000.

Sydney's slow-and-steady momentum continued with a +0.3 per cent gain while Melbourne saw another small dip of -0.2 per cent. 

The three standout capital city markets of Brisbane, Adelaide and Perth all comfortably cleared +1.0 per cent for the month, with Perth hitting a full +2.0 per cent. 

The smaller capitals of Hobart, Darwin and Canberra all saw declines in line with Melbourne's after a cooler winter season. 

Regional markets remained more-or-less in lockstep with their city counterparts as regional WA once again hit the highest rate of growth for the month of +1.6 per cent. 

CoreLogic's head of research, Eliza Owen, noted that 2024's winter was generally softer than the previous year. 

"The seasonally adjusted Home Value Index had a stronger result through the three months to August, at +1.7 per cent. But this is still down from the +3.3 per cent lift seen in the winter of 2023," she said.

Three key takeaways from the current market

A number of 2024 property trends have become more firmly entrenched while other shifts are now just emerging. Here are the headline issues worth tracking. 

The two-speed market has caused a national rankings shift

Up until the onset of the pandemic in 2020, Sydney and Melbourne were the clear frontrunners in terms of Australia's most expensive housing markets. 

The explosive growth seen in Brisbane, Perth and Adelaide in contrast with Melbourne's relative underperformance has created a far more level playing field between the four cities, though. 

Brisbane now has Australia's second-highest median price followed by Adelaide and Perth, with Melbourne sitting in fifth place as of August. 

Ms Owen pointed out that Melbourne's significantly higher proportion of units to houses is a key factor but noted that it's "the first time in CoreLogic’s forty-year median dwelling value series that Adelaide has had a higher median than Melbourne."

But she warned that "Housing values cannot keep rising at the same pace in the mid-sized capitals of Perth, Adelaide and Brisbane when affordability is becoming increasingly stretched, particularly in the context of elevated interest rates, loosening labour market conditions and cost of living pressures."

Demand for affordable housing remains 'strained'

The trend of 'cheaper' markets outperforming has continued throughout winter. 

The lower quartile of capital city homes (meaning the least expensive 25 per cent of properties) rose in value by +2.7 per cent over three months compared to just +0.3 per cent for the upper quartile. 

Units also saw more growth than houses in five of the eight capital cities over that period as buyers funnel towards more affordable homes as high prices and interest rates limit people's options. 

CoreLogic's report summarised by saying "More of the buyer pool may be skewed to the lower-priced segment of the market, supporting values at the more affordable end of the pricing spectrum."

Rental markets are finally softening

It's been an incredibly challenging few years for Australian renters with vacancy rates plunging towards record lows and rents growing by over 10 per cent per annum in many markets. 

As of August, Australian rents were up +7.2 per cent annually, the lowest rate seen since May 2021. Thankfully for tenants, the momentum is finally slowing. 

"On the demand side, net overseas migration has dropped, with ABS data showing a decline from 165,000 in the March quarter of 2023 to 107,000 in December quarter, and overseas arrivals data suggests a fall in international student arrivals," Ms Owen explained. 

"On the supply side, investor trends vary state-to-state, but nationally investor loans secured were up 10.7% in the year to June. Dwelling completions remain an issue, with a strained construction sector keeping a floor under both rent and purchase prices."

With investors returning to the market, population growth easing, and data showing share housing is on the rise, there looks to be some welcome relief on the way for Australian renters. 

What's next for Australian property? 

While there was major diversity between markets throughout the winter, CoreLogic's figures show an overall slowdown in the cooler months, and they expect that to continue for the rest of the year. 

Their report suggested that, "Looking forward, the national housing market should continue to see modest value increases to the end of 2024."

The long-running shortage of supply in the face of strong demand is keeping upward pressure on prices and we're yet to see an uptick in residential building which could relieve that shortage. 

CoreLogic noted that "Buyer numbers have slowed amid high cost of living pressures, but vendors in most markets will likely be empowered to delay their home sale if buyers do not meet their price expectations."

Looking to the spring selling season ahead, it may not be the frenzied rush we sometimes see as temperatures rise. 

"In such a varied market, those looking to sell this spring should be conscious of local conditions, such as the number of properties currently on the market, the amount of time properties are taking to sell, auction clearance rates and price movements, before listing," the report advised.