October brings further property price growth but the trend is easing
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After several volatile years with historic highs and sharp lows, Australia's property markets are moving forward at a far more stable rate in 2024.
CoreLogic's latest report shows that growth around the country, while still present, has been gradually easing in recent months as interest rates remain high and affordability continues to be a widespread issue.
But with expected rate cuts on the horizon, is there a change up ahead?
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Australian property prices: October 2024
The median Australian home value increased by +0.3 per cent in October.
While this was the 21st month of consecutive growth for the nation, it also reflected the slow but consistent cooling of our property markets.
| Market | Month | Quarter | Annual | Median value |
|---|---|---|---|---|
| Sydney | -0.1% | 0.1% | 3.7% | $1,193,240 |
| Melbourne | -0.2% | -0.8% | -1.9% | $778,926 |
| Brisbane | 0.7% | 2.4% | 13.0% | $883,357 |
| Adelaide | 1.1% | 3.7% | 15.0% | $808,644 |
| Perth | 1.4% | 4.1% | 22.6% | $804,621 |
| Hobart | 0.8% | -0.1% | -1.2% | $650,881 |
| Darwin | -1.0% | -1.3% | -0.1% | $492,692 |
| Canberra | -0.3% | -0.9% | 0.4% | $850,223 |
| Combined capitals | 0.2% | 0.8% | 5.9% | $895,429 |
| Combined regional | 0.6% | 1.1% | 6.3% | $643,302 |
| Australia | 0.3% | 0.9% | 6.0% | $809,849 |
Sydney saw its first monthly decline since January 2023 of a minor -0.1 per cent, while Melbourne also had a modest dip of -0.2 per cent.
Adelaide and Brisbane again enjoyed considerable gains, though easing in pace, and Perth broke through the $800,000 median barrier with another +1.4 per cent rise.
Hobart got a sudden, sharp bump of +0.8 per cent, Darwin fell a surprising -1.0 per cent, and Canberra maintained its relatively neutral path.
Regional markets clearly outperformed the capitals in October, with the biggest leaps being seen in regional SA and WA.
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.
Listings are rising but overall stock levels are mixed
The spring selling season traditionally brings an influx of listings to the market, and this year's spring has been no different.
Total listings across the country are up +12.7 per cent since winter with Perth seeing the most substantial increase in seller activity.
“Total listings are now +13.2 per cent above the previous five-year average in Sydney and +13.0 per cent higher in Melbourne," CoreLogic's research director Tim Lawless explained.
"Despite the rise in listings across the mid-sized capitals, Perth, Adelaide, and Brisbane are still seeing advertised stock levels more than -20 per cent below the five-year average for this time of the year.
"These markets remain well and truly in favour of sellers, although the balance is starting to gradually improve.”
Home sales haven't kept pace with new listings
While it's important to remember that the fresh increase to listings has come from below-average levels in many markets, buyers don't look to have been returning at the same rate.
Sales volumes in the capital cities over the three months to October were down -7.5 per cent from the previous quarter, dropping -1.6 per cent below the same time last year.
"With higher levels of advertised supply and less purchasing activity, selling conditions have loosened," CoreLogic's report stated.
"Capital city auction clearance rates held below the 60 per cent mark through most of October, while private treaty metrics are showing a subtle rise in median days on market, especially in cities where advertised stock levels are above average."
More affordable markets continue to shine
A running theme throughout 2024 has been the outperformance of more affordable properties and markets as high interest rates and high median prices continue to put pressure on buyers.
Mr Lawless noted that after a mass exodus of investors as mortgage stress pushed many to sell up in 2023 and into this year, there's also been a return to buying activity from that cohort.
"A combination of less borrowing capacity and broader affordability challenges, as well as a higher-than-average share of investors and first home buyers in the market is the most likely explanation for stronger conditions across the lower value cohorts of the market," he said.
“The past three months has seen the lowest quartile either record a higher growth rate or smaller decline relative to the upper quartile or broad middle of the market across every capital city except Canberra.”
What's next for Australian property?
Perhaps the biggest news to come from October was better-than-expected inflation figures, leading many forecasters to double down on their predictions that we could see an interest rate cut coming in February 2025.
Looking at upsides in the market, CoreLogic's report pointed out that "there is a trend towards lower inflation, meaning a cut in interest rates is looking likely in the first quarter of next year, while labour markets are holding tight and low levels of new housing supply persist.
"Each of these factors should help to keep a floor under prices."
While expectations are for rates to come down slowly and to a lesser degree, it could spark some renewed interest from buyers as borrowing capacities start to improve.
Rate cuts would also come as a welcome relief to homeowners servicing a mortgage and could inject some additional confidence into the market.
For the near future, CoreLogic sees overall price growth continuing to ease as affordability remains an ever-present concern for people all around the country.
