CoreLogic’s latest Home Value Index (HVI) has revealed a notable increase, climbing by 0.9% in October, a slight acceleration from the 0.7% (initially reported as 0.8%) uptick in September. The national HVI has seen a considerable rise of 7.6% since hitting its low point in January, now standing just 0.5% shy of the all-time high recorded in April of the previous year.
Tim Lawless, CoreLogic’s research director, suggests that the national index is on the verge of a full recovery. With the current growth trajectory, he predicts that by mid-November, the national HVI could surpass the record high, effectively reversing the 7.5% decline observed from May 2022 through January 2023.
Despite the overall growth in housing values across most of the capital cities, the quarterly growth rate has experienced a noticeable slowdown. While home values rose by 3.7% in the three months leading up to June 2023, the increase has moderated to 2.6% in the three months to October.
Mr. Lawless attributes this deceleration to heightened stock levels on the market combined with affordability challenges. The surge in new listings suggests that buyer demand might struggle to keep up, especially with the current climate of high interest rates.
Every capital city, with the exception of Darwin, which saw a slight dip of 0.1%, reported growth in dwelling values for the month. Perth, Brisbane, and Adelaide were standout performers, with increases of 1.6%, 1.4%, and 1.3% respectively.
Significantly, more than a 10% growth in dwelling values has been recorded in the first ten months of the year for three capitals, with Sydney at 10.9%, Perth closely behind at 10.8%, and Brisbane at 10.2%.
Brisbane’s housing market has notably bounced back in October, reaching a new record high that offsets the previous 8.9% decline in values. Perth and Adelaide are also experiencing record highs after a brief downturn earlier in the year.
Meanwhile, Sydney and Melbourne are still recovering, currently standing at 2.2% and 3.7% below their peak values from early 2022, respectively. Hobart’s market remains the farthest from its peak, with current values 11.6% lower.
Regional markets have not quite kept pace with their metropolitan counterparts, with the combined regional index rising by 0.7% in October, slightly less than the 0.9% lift seen across the combined capitals. This pattern of stronger growth in the capital cities is consistent across every state.
Even with a tempered growth rate, all ‘rest of state’ regions, except for Regional Tasmania (where values remained unchanged), saw an uptick in home values over the month. Regional Queensland, Western Australia, and South Australia are exhibiting robust conditions, each reaching new highs in October.
Out of 307 SA3 regions analysed across the country, 41 (or 13.4%) have seen a decrease in value over the last quarter, mostly concentrated in Regional Victoria and Regional New South Wales.
Regional Victoria, in particular, is experiencing the most subdued market conditions, with home values nearly stagnant over the quarter and lingering 7.2% below their peak in May 2022. This trend is occurring alongside a surge in stock levels, up 27.2% from the previous year and 11.1% above the five-year average, with sale activity estimated to be 17% lower than the five-year average.
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