Home values have risen 0.8 per cent in September as the nation’s supply and demand imbalance pushes prices skyward.
According to the CoreLogic Hedonic Home Value Index, the September increase is the eighth consecutive month of growth and follows a 0.7 per cent climb in August.
National home values rose 2.2 per cent in the September quarter, down from 3 per cent in the June quarter.
Adelaide recorded the highest capital gain, with the median home value increasing 1.7 per cent in September to $691,591.
This was followed by Perth with values jumping 1.3 per cent for the month to a median value of $618,363.
Brisbane also recorded a 1.3 per cent gain, while values in Sydney rose 1 per cent and 0.4 per cent in Melbourne in September.
The only capital to record a fall in values was Hobart, with the median value dropping 0.6 per cent to $658,994.
CoreLogic Research Director Tim Lawless said the housing market performance in each capital city directly correlated with how many properties were on the market.
“The three capitals recording the highest capital gain each have advertised supply levels that are around 40 per cent below their previous five-year average,” he said.
“Advertised supply levels across Hobart, where values are still trending lower, have been holding at above average levels since June last year and were almost 40 per cent above its five-year average.”
The index has risen 6.6 per cent since January, however home values are still 1.3 per cent below their record peak in April 2022.
Mr Lawless said at the current rate of growth, the index would likely reach a new high by the end of November.
“We have already seen dwelling values reach new record highs in Perth and Adelaide,” he said.
“Brisbane looks set to reach a new record high in October, with home values currently only 0.6 per cent below their previous peak.
“Hobart and Canberra have the furthest to go before staging a nominal recovery, with dwelling values remaining 12.4 per cent and 7 per cent below their cyclical highs from last year.”
The high end market has led the growth slowdown, with the quarterly rate of growth across upper quartile dwellings easing down to 2.3 per cent, while the lower quartile growth rate picked up to 3.2 per cent.
Mr Lawless said the shift was partly due to the lower value capitals recording a faster rate of growth but even in Adelaide, Brisbane and Perth, it’s the lower end of the market that has performed better.
In Sydney and Melbourne the middle of the market has the highest growth rate after previously being led by the high-end.
“Possibly we are starting to see renewed affordability challenges deflecting more demand towards the middle of the market where barriers to entry are lower,” Mr Lawless said.
Regional markets are continuing to lag the capitals with every ‘rest of state’ region recording weaker growth conditions relative to their capital city counterpart over the September quarter.
At a broad level, the combined regional markets recorded a 1.1 per cent rise in dwelling values through the September quarter, which was less than half the 2.5 per cent gain across the combined capital city market.
“Softer housing conditions across regional Australia looks to be more demand-driven, with the estimated number of home sales 6.5 per cent lower than a year ago and 9.2 per cent lower relative to the previous five-year average,” Mr Lawless said.
“In contrast, the estimated volume of home sales across the combined capital cities was 1.9 per cent higher than a year ago and 6.3 per cent above the five-year average.”
The flow of new listings has increased since early June, bucking the normal winter slump.
In the four weeks to September 24, the flow of new capital city listings was 14 per cent higher than at the same time in 2022 and 8 per cent above the five-year average.
The number of total advertised properties has also climbed, with the rolling four-week count of total listings up 6.7 per cent since its low point in early July.
“More listings imply more choice for buyers, and more choice means less urgency, more time to deliberate on the purchase and negotiate with the vendor,” Mr Lawless said.
Mr Lawless adi the outlook for housing values remained largely positive, but there was some risk of a slowdown.
He said an acceleration in the flow of new listings, while a normal feature of spring and early summer, could give buyers greater leverage to negotiate if it continued beyond the usual timeframe.