Australian housing values look to have bottomed out, posting a second consecutive monthly rise, according to CoreLogic’s national Home Value Index.
The index, after falling 9.1 per cent between May 2022 and February 2023, increased by half a per cent in April, following a 0.6 per cent lift in March to be 1.0 per cent higher over the past three months.
Sydney values increased 1.3 per cent in April and is leading the positive turn in housing conditions, with home values rising each month since February.
The NSW capital’s values are now 3.0 per cent higher than the trough recorded in January.
In further evidence that a positive growth trend has emerged, the four largest capital cities all recorded a rise in housing values over the rolling quarter, according to CoreLogic, with Melbourne up 0.3 per cent, Brisbane 0.1 per cent and Perth by 1.0 per cent.
Adelaide, Hobart, Darwin and Canberra were all in negative territory with -0.1 per cent, -2.4 per cent, -2.0 per cent and -1.0 per cent respectively.
CoreLogic research director Tim Lawless said it as becoming increasingly clear the housing market has moved through an inflection point.
“Not only are we seeing housing values stabilising or rising across most areas of the country, a number of other indicators are confirming the positive shift,” he said.
Change in home values, April 2023
“Auction clearance rates are holding slightly above the long run average, sentiment has lifted and home sales are trending around the previous five-year average.”
The more positive trend in housing values comes amid a worsening imbalance between supply and demand, Lawless said.
“A significant lift in net overseas migration has run headlong into a lack of housing supply,” he said.
“While overseas migration would normally have a more direct correlation with rental demand, with vacancy rates holding around 1 per cent in most cities, it’s reasonable to assume more people are fast tracking a purchasing decision simply because they can’t find rental accommodation.
“Many prospective vendors have stayed on the sidelines through the downturn, keeping inventory at below average levels and providing sellers with some leverage at the negotiation table.”
Lawless said the growing expectation the rate hiking cycle was over, or nearly over, following a sharp decline in values was another likely factor supporting housing demand.
“This could be contributing to a broader perception that the market has bottomed out, and for those attempting to time the market, that it is considered to be a good time to buy,” he said.
“As interest rates stabilise there is a good chance consumer sentiment will improve, bolstering housing market activity from both a purchasing and a selling perspective.”
