Recovery Rolls on as Home Values, Prices Rise Again

Home values and prices rose again last month as the market’s recovery continues to show no signs of weakening.

National home prices reached a new peak in March despite an increase in homes listed for sale, according to the latest PropTrack Home Price Index.

The report found that home prices rose in the combined capital cities (0.40 per cent) and regional areas (0.19 per cent) in March.

Perth led the nation for home price growth for the month, posting its strongest annual home price growth on record as prices rose 0.99 per cent from February and 18.62 per cent on the year prior.

The report found national home prices reached a new peak in March, up 0.34 per cent month-on-month and 6.79 per cent year-on-year.

Adelaide and Brisbane also reached a fresh price peak in March, with prices growing by 13.47 per cent and 12.90 per cent respectively over the year to March.

Price growth in regional markets lifted 0.19 per cent to a new peak, with all areas except regional Victoria recording price growth in March.

Along with their respective capital cities leading annual price growth in March, South Australia, Queensland and Western Australia had the strongest market activity for the regions with annual growth of 12.81 per cent, 10.18 per cent and 10.01 per cent respectively.

PropTrack home prices, March, 2024

▲ Source: PropTrack

Meanwhile, CoreLogic's national Home Value Index (HVI) rose 0.6 per cent in March, on par with February’s increase, taking the current upswing in housing values through its 14th straight month of growth.

Since declining 7.5 per cent between April 2022 and January 2023, the national HVI has increased 10.2 per cent, about $71,832, rising to record highs each month since November.

Every capital city except Darwin (down 0.2 per cent) recorded a rise in home values for the month, although CoreLogic research director Tim Lawless said the monthly gains continued to be punctuated by diversity.

“At one end of the scale we have Perth’s housing market where values were up 1.9 per cent for the month, followed by Adelaide and Brisbane with 1.4 per cent and 1.1 per cent growth,” he said.

“The remaining capitals are showing much lower rates of change, although Melbourne is the only capital city to record a negative quarterly movement, down 0.2 per cent over the first three months of the year.”

The national quarterly pace of growth has accelerated from 1.4 per cent in the last quarter of last year to 1.6 per cent in the first quarter of this year.

Home values for March, 2024 compared to February

▲ Source: CoreLogic

Although housing values are rising faster than at the end of last year, the quarterly trend of growth has halved relative to the middle of last year when home values were rising 3.3 per cent quarter-on-quarter.

“Rate hikes, cost of living pressures and worsening housing affordability are all factors that have contributed to softer housing conditions since mid-last year. However, an undersupply of housing relative to demand continues to keep upwards pressure on home values despite these headwinds,” Lawless said.

“The diversity in housing value outcomes can be explained by significant differences in factors like housing affordability, demand-side pressures from population growth and shortcomings in housing supply.

“Focusing on the extreme growth conditions in Perth, despite such a rapid pace of capital gains, housing values remain relatively affordable compared with the larger capital cities.

“Housing remains in short supply and purchasing demand is still high due to interstate and overseas migration rates that are well above average.”

The volume of home sales through the first quarter of the year was estimated to be 9.5 per cent higher relative to last year’s first quarter, although comparison with a year ago is from a relatively low base, with the housing market bottoming out from the downturn at the beginning of last year.

Compared to the previous decade average for this time of the year, home sales are estimated to be 3.7 per cent higher.