Price growth continues at a slower rate as spring blooms
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The spring selling season is here and sellers are returning to the market in force as listings rise above average levels.
CoreLogic's latest report shows that Australian property prices are still rising as a whole but our markets remain fractured as some boom while others plateau.
Find out who's coming out on top and what's in store for the remainder of 2024 and beyond.
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Australian property prices: August 2024
The national median property price rose for the 20th consecutive month in August, gaining +0.4 per cent according to CoreLogic data.
Once again, this was thanks in large part to Australia's three fastest-growing capital cities.
| Market | Month | Quarter | Annual | Median value |
|---|---|---|---|---|
| Sydney | 0.2% | 0.5% | 4.5% | $1,188,912 |
| Melbourne | -0.1% | -1.1% | -1.4% | $777,390 |
| Brisbane | 0.9% | 2.7% | 14.5% | $881,091 |
| Adelaide | 1.3% | 4.0% | 14.8% | $802,075 |
| Perth | 1.6% | 5.7% | 24.1% | $797,184 |
| Hobart | -0.4% | -0.8% | -1.1% | $654,302 |
| Darwin | 0.1% | -0.7% | 2.0% | $492,332 |
| Canberra | -0.3% | -0.9% | 0.7% | $844,882 |
| Combined capitals | 0.5% | 1.1% | 6.7% | $891,639 |
| Combined regional | 0.4% | 1.0% | 6.7% | $640,243 |
| Australia | 0.4% | 1.0% | 6.7% | $807,110 |
Perth's +1.6 per cent increase saw the booming city's median price come within touching distance of $800,000 while Adelaide's +1.3 per cent pushed the SA capital above that threshold.
Brisbane also continued its blazing run with a strong uptick of +0.9 per cent while Sydney received a more modest +0.2 per cent boost.
Melbourne again hovered around flat levels for the month, as did Darwin, with Hobart and Canberra recording small losses.
As has been the case throughout the year, the different states' regional markets closely matched their capital city counterparts.
Although national growth has continued throughout 2024, there has been a clear easing in momentum for many markets as the year has progressed.
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.
Seller activity is strong so far this spring
The spring selling season typically sees an uplift in listings and buyer activity as the warmer weather creates a more inviting environment for presenting a property for sale.
After several unusual years driven by the pandemic and interest rate movements, spring in 2024 looks to be off to a more conventional start.
Nationally, new listings for September were +8.8 per cent higher than the five-year average, suggesting that more sellers are moving ahead with confidence to capitalise on strong capital gains.
"The rise in real estate inventory is a seasonal trend, with spring and early summer one of the busiest periods of the year for selling," CoreLogic's research director Tim Lawless said.
"However, the flow of freshly advertised housing stock hasn’t been this high at this time of the year since 2021."
Buyers are still flocking towards lower price points
Although there hasn't been an interest rate hike in close to a year, the high rate environment along with record-high property prices continue to put pressure on buyers.
A flight towards affordability has been evident throughout 2024 in every capital city except Canberra and Darwin, and units have started to broadly outperform houses when it comes to price growth.
Over the past 12 months, lower-quartile properties — ie. the least-expensive 25 per cent of homes in a particular market — have seen strong price gains of +12.4 per cent.
By comparison, the upper quartile has seen a more modest increase of +3.8 per cent over the same period.
It's possible that this trend will continue until interest rates eventually fall or lending restrictions are loosened to give borrowers additional leeway in what remains a competitive market.
Overseas migration is easing, helping to reduce rental market pressures
Over the past two years, rents have surged and vacancy rates have dwindled across the country as rental demand has vastly outstripped supply.
Two key factors influencing this trend have been record levels of overseas migration and a growing number of investors exiting the market. For now, falling migration numbers are beginning to reduce some pressure on Australian tenants.
"The latest demographic trends from the ABS showed net overseas migration reduced by 19% from the record highs in the first quarter of 2023," Mr Lawless said.
"The March quarter of 2024 saw 133,800 net overseas migrants arrive in Australia, 31,700 fewer than a year prior, helping to take some pressure off rental demand."
He noted that a rise in shared housing and multi-generational households may also be helping to soften vacancy rates around the country.
What's next for Australian property?
Although the pace of growth has been easing in recent months, CoreLogic predicts prices to continue to rise on the national level.
Falling inflation, a lack of new stock being built, recent tax cuts and the expectation for interest rates to go down within the next six months are all helping to prop home prices up.
However, affordability remains a major issue across the country, leaving buyers struggling to borrow enough to remain competitive in the face of record-high property values.
It's likely that cheaper options out there in the market will continue to outperform in the near future, with units seeing renewed interest in many areas.
Looking to the remainder of spring, Mr Lawless sees supply coming on stronger than demand in some markets.
"If the first month of spring is anything to go by, purchasing activity isn’t keeping pace with the flow of new listings," he said.
"Markets where stock levels have lifted the most are unsurprisingly the weakest from a values perspective. A further rise in advertised supply is good news for buyers, but for vendors, it means more competition and the potential for a softening in selling conditions."
Keeping an eye on local metrics like auction clearance rates, days on market, and listing levels will help paint a picture of how well your area is performing in the months ahead.
