Australia’s residential real estate market continues its upward climb, now with a combined value of $10.1 trillion at the end of September. This is a minor, yet substantial, increase from the $10 trillion marked in the previous month. The monthly Housing Chart Pack by CoreLogic outlines these statistics, shedding light on national home values, sales volumes, and emerging trends in new listings.
Rising 2.2% in the quarter leading up to September, national home values indicate sustained growth, albeit at a marginally slower pace than the 2.4% growth seen in the three months to August. The upgraded Home Value Index model further strengthens this narrative, recording a 3.9% year-on-year rise in national dwelling values as of September. After turning positive in August, the annual change in home values appears to be on a favourable trajectory.
When breaking down these numbers to capital city levels, the market value for combined capital cities saw a 0.9% uptick in September, a slight advancement from the 0.8% increase in August. CoreLogic estimates that national sales in September were 39,216, which is a shade below the five-year average of 40,607 sales per month. Furthermore, capital city sales numbered 24,996, marking a -1.8% departure from the historic average. Meanwhile, the combined regional market had 14,220 sales, showing a -6.1% dip below the five-year average.
In terms of how long it takes to sell a property, the median time remains relatively stable at 30 days for the national level. However, there is an interesting point to note about regional Australia. The time-on-market metric has seen a slight year-on-year increase, corroborating with other indicators of a softer market performance in these areas over the past 12 months.
Vendor discounts are also changing. On a national level, the median vendor discount was -3.8% in the quarter leading to September, improving from the recent low of -4.3% at the end of last year. This suggests vendors are more optimistic and less inclined to reduce their property prices to secure a sale.
As we step into the spring selling season, new listings are making headlines. At the national level, there were 38,428 new listings observed in the four weeks to October 8, 2023, just 3% below the historic five-year average. The total number of new listings during this period was 140,524, still lower than the five-year average due to higher sales absorption. Nonetheless, these numbers are on an upward trend in some markets, including Melbourne, Hobart, Canberra, and some regional markets.
When it comes to property clearance, combined capital cities averaged a 65.2% rate in the four weeks ending 8 October, slightly down from 66.1% in the previous month. Yet, it’s not just about buying; renters too are feeling the heat. Australian rent values recorded a 0.7% increase in September, contributing to a national annual growth of 8.4%.
Lastly, dwelling approvals surged 7% in August, with unit approvals increasing by 8.8% and detached house approvals by 6%. However, the overall trend for new dwelling approvals has been below par, down 21% from the decade average since the start of the year. Factors like high-interest rates, land values, and construction costs are contributing to this subdued level of development applications. The Cordell Construction Cost Index rose by 0.5% in the September quarter, indicating a normalisation in construction costs.
In summary, the Australian residential property market is far from static. While the broader picture remains positive, regional nuances and vendor behaviour offer interesting facets for potential buyers, sellers, and renters alike.
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