News & Research

Heat comes out of the housing market as values across Melbourne dip and Sydney slows

CoreLogic’s national Home Value Index (HVI) rose 0.6% in November, the smallest monthly gain since the growth cycle commenced in February.

Despite the slowdown, the national HVI reached a new record high in November. After falling -7.5% from a peak in April 2022 to a trough in January 2023, housing values have bounced 8.3% higher over the past 10 months, demonstrating a clear ‘V’ shaped recovery.

While the headline trends have slowed, multi-speed conditions have become increasingly evident across the capitals, with three cities recording a decline in values over the month. These were Melbourne and Hobart, both down -0.1%, and Darwin, down -0.3%. Growth in Sydney home values also slowed sharply, reducing to 0.3%, the smallest monthly gain through the recovery cycle to-date. With Sydney home values slipping into negative growth over the last week of the month, we could see Sydney following Melbourne’s lead, with home values stabilising or dipping lower in December.

On the flip side, Perth housing values accelerated in November, posting the largest monthly gain since March 2021 at 1.9%. Brisbane (1.3%) and Adelaide (1.2%) also stand out with a resilient and rapid pace of growth.

CoreLogic Research Director, Tim Lawless, said these three cities continue to show remarkably low levels of advertised supply while purchasing activity is holding above average levels.

“This imbalance between available supply and demonstrated demand is keeping strong upwards pressure on housing values across these markets, despite the downside factors leading to weaker housing market conditions across the lower eastern seaboard,” Mr Lawless said.

“The Melbourne Cup day rate hike has clearly taken some heat out of the market, but other factors like rising advertised stock levels, worsening affordability and persistently low consumer sentiment are also acting as a drag on value growth in some markets,” he said.

Slower growth conditions across the upper quartile of Sydney and Melbourne have become increasingly prominent, with the most expensive quarter of the market across both cities now recording the lowest rate of growth on a monthly and rolling quarterly basis.

“The more expensive end of the market tends to lead the cycles in these cities,” Mr Lawless said.  “As borrowing capacity reduces, we may be seeing more demand deflected towards lower housing price points, with the broad middle of the market now recording the strongest rate of growth in Sydney and Melbourne.”

The gap between regional and capital city growth rates has converged, with both the combined capitals and combined regionals index recording a 0.6% rise in values in November.  The convergence comes after regional markets have lagged their capital city counterparts through the recovery phase to-date.

“While housing values across both of these broad regions found a floor in January, the combined capitals index has since increased by more than double the combined regionals index, up 9.6% and 4.3% respectively to the end of November,” Mr Lawless said.

Regional Australia’s housing values remain -1.8% below the historic high recorded in May 2022, with Regional Victoria (-6.7%) and Regional NSW (-5.5%) recording the largest shortfall from record levels.

Download the November HVI


CoreLogic Australia

CoreLogic Australia

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