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OtherLindsay SaundersThu 04 Jan 24

December Rises Cap Strong Year for Housing Values, Prices

The Australian housing market recorded a strong year despite several factors against it, notably the steady rise of interest rates.

Data for the year from two of the nation’s leading research services underlined that—CoreLogic said its Home Value Index rose 8.1 per cent in 2023 while PropTrack said prices rose by 5.52 per cent.

According to CoreLogic, 2023 had been a significant turnaround for value after a 4.9 per cent drop in 2022, but well below the 24.5 per cent surge of 2021. 

December’s 0.4 per cent increase finished 2023 with a relatively soft monthly rise in home values.

“This was the smallest gain in our national monthly HVI since values started rising in February,” CoreLogic research director Tim Lawless said.

“After monthly growth in home values peaked in May at 1.3 Tim Lawless, a rate hike in June and another in November, along with persistent cost of living pressures, worsening affordability challenges, rising advertised stock levels and low consumer sentiment, have progressively taken some heat out of the market through the second half of the year.”

CoreLogic’s Home Value Index to December, 2023

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Despite the annual 8.1 per cent increase, the year was punctuated by diversity, with the annual change in housing values ranging from a 15.2 per cent surge in Perth to a 1.6 per cent fall across regional Victoria.

Home prices steady


PropTrack said national home prices held steady in December as growth in regional areas counteracted falls in the capital cities.

Overall, prices rose by 5.52 per cent in 2023.

After hitting a fresh peak in November, combined capital city prices fell 0.09 per cent in December, marking the first time prices declined in 2023, it said.

Across December, prices fell in Sydney (-0.08 per cent), Melbourne (-0.55 per cent), Hobart (-0.41 per cent), and Canberra (-0.66 per cent).

Perth (0.69 per cent) and Adelaide (0.59 per cent) continued to record strong growth, with prices also up in Brisbane (0.27 per cent) and Darwin (0.1 per cent).

In contrast to the mixed movement across Australia’s capital cities, combined regional areas experienced prices increase in December, resulting in monthly growth of 0.23 per cent.

Regional home prices reached a new peak in December, having risen by 3.2 per cent over 2023.

null
▲ Hahndorf in South Australia—regions in that state and Queensland drove home price growth ourside the capitals.

Regional Queensland and South Australia were the key drivers of growth, up a respective 0.51 per cent and 0.5 per cent over the month to reach new peaks in December.

“Several factors contributed to the slowdown in home prices during the last quarter of 2023,” PropTrack’s report said.

“There was an additional interest rate rise as well as an increase in the supply of homes listed for sale, which provided buyers more choice and helped to alleviate competition.

“Despite regional areas experiencing higher growth in December, combined capital city areas were the clear outperformers in 2023, with prices up 6.44 per cent over the course of the year versus 3.2 per cent in the rest of state markets.”

Listings plummet in December


The number of national residential property listings decreased sharply by 5.2 per cent in December, dropping to 234,194 homes from the 247,062 recorded in November.

Accordint to SQM Research, nationally, new listings (less than 30 days) fell 3.2 per cent in December, with 54,409 fresh property listings entering the market.

All capital cities reported decreases in new listing, SQM said.

Distressed property listings decreased by 6.2 per cent while national combined home asking prices dropped by 0.2 per cent, maintaining a value of $806,612.

In Sydney, there was a substantial 15.2 per cent decline in total listings for December, primarily propelled by a noteworthy 47.6 per cent decrease in new listings, according to SQM.

Similarly, Canberra recorded an 11.4 per cent reduction in total listings, with a significant 45.0 per cent decrease in new listings driving the decline.

Over the course of the 12-month period, residential property listings across the nation experienced 2.5 per cent growth.

Canberra and Hobart stood out, reporting a remarkable increase of 27.4 per cent and 19.2 per cent respectively.

ResidentialAustraliaReal EstateSector
AUTHOR
Lindsay Saunders
The Urban Developer - News Editor
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Article originally posted at: https://theurbandeveloper.com/articles/december-rises-cap-strong-year-for-housing-values-prices