INDUSTRY NEWSNationalReal Estate News

Property values hit new record in 2023-24 financial year

Australian property values soared 8 per cent in the 2023-2024 financial year, overcoming a significant slump from the year before.

According to the CoreLogic Hedonic Home Value Index, homeowners now attract the equivalent of a $59,000 boost to the median home value, which has risen to $794,000.

The rise is a turnaround on a 2 per cent drop in the national index in the 2022-2023 financial year, when annual growth was weighed down by a 7.5 per cent drop in values in the nine months following May 2022, when the cash rate target started to rise. 

CoreLogic Research Director, Tim Lawless, said despite the strong annual gain, the rate of growth had slowed since the high of mid 2023, when the quarterly rate of change peaked at 3.3 per cent.

The most recent June quarter saw dwelling values rise 1.8 per cent, which is roughly in line with the March quarter (1.9 per cent) and December quarter last year (1.8 per cent). 

“The persistent growth comes despite an array of downside risks including high rates, cost of living pressures, affordability challenges and tight credit policy,” he said.

“The housing market resilience comes back to tight supply levels which are keeping upwards pressure on values.”

The index also revealed that capital city markets were running at different speeds, with Melbourne and regional Victoria posting values down -0.2 per cent and -0.3 per cent, respectively, over June 2024. 

Hobart joined Melbourne and regional Victoria recording a subtle decline in values over the June quarter (down 0.3 per cent) to be slightly lower over the financial year (down 0.1 per cent). 

Regional Victoria was the only other broad region to record a fall in values over the year, down 0.5 per cent.

At the opposite end of the market, Perth values continued to surge, up 2 per cent in the June quarter to be 23.6 per cent higher, annually.

Adelaide values also increased 1.7 per cent in June to be 15.4 per cent higher over the financial year, while Brisbane values were 1.2 per cent higher over the month and 15.8 per cent up over the year.

Mr Lawelss said the growth trends were reflected in advertised stock levels, with the strongest markets continuing to show a severe shortage of homes available for sale. 

“Over the four weeks ending June, the number of homes advertised for sale in Perth was 23 per cent lower than at the same time last year and 47 per cent lower than the previous five year average,” he said.

“Adelaide (down 43 per cent) and Brisbane (down 34 per cent) also had listing numbers significantly below average for this time of year.”

On the other hand, Melbourne listings have risen to be 14 per cent above the five year average and Hobart listings have been elevated for several years, tracking 46 per cent above average.

An undersupply of housing remains the primary factor keeping upwards pressure on home values despite a growing element of downside risk. 

“We can loosely categorise housing supply into advertised listings, which provide a measure of available supply, newly built homes and rental supply,” Mr Lawless said.

We could also add social housing to the list. 

Each of these components remain insufficient to varying degrees, to cater for housing demand which is why we are seeing values persistently rising at a time when interest rates and inflationary pressures are high, sentiment is deeply pessimistic and credit policy is tight.”

Mr Lawless said most cities now had more new listings coming to market as vendors became active. 

Nationally, the flow of freshly advertised stock was tracking 12 per cent higher than a year ago and 4 per cent above the previous five year average. 

But homes are being snapped up as soon as they are added to the market, with total advertised supply levels nearly 18% below the previous five year average. 

“The rise in new listings could be a signal that more homeowners are motivated or needing to sell,” Mr Lawless said.

“It is clear that savings accrued through the pandemic are being drawn down for some households due to the combination of a high cost of living and elevated debt levels running up against interest rates that look set to remain higher for longer.”

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Kylie Dulhunty

Kylie Dulhunty is the Editor at Elite Agent.