Property Snapshot – National Home Value Report

CoreLogic’s latest quarterly report confirms that Australia’s smallest cities and regional areas are driving growth in national housing values as Sydney and Melbourne decline.

The first quarter of 2022 has seen Australian dwelling values rise by 2.4%, adding approximately $17,000 to the value of an Australian dwelling; this time last year values were rising at more than double the current pace, up 5.8% over the three months to March 2021 before the quarterly rate of growth peaked at 7.0% over the three months ending May 2021.

CoreLogic’s research director Tim Lawless says that while the monthly rate of growth was up in some cities and regions, there is mounting evidence that housing growth rates are losing momentum. With the softening market conditions, the national annual growth rate (18.2%) has fallen below the 20% mark for the first time since August 2021, after reaching a cyclical high of 22.4% in January 2021.

National housing turnover is also easing with preliminary transaction estimates for the March quarter tracking 14.3% lower than the same period in 2021. However, regional Australia continues to show some resilience to a slowdown with housing values across the combined regional areas rising at more than three times the pace of the combined capital cities through the March quarter.

The Australian Bureau of Statistics (ABS) regional population growth figures for FY2020-21 assist to explain the robust housing conditions outside of the capitals. The number of people living in regional areas of Australia increased by approximately 71,000 residents, whilst residents in living in the capitals fell by approximately 26,000 (mostly in Melbourne, and to a lesser extent Sydney).

CoreLogic reports that the housing market has transitioned from an upswing generally characterised by a strong and broad-based rise across the regions of Australia, to one best described as multi-speed. Despite the diversity in growth between the capital cities and regional areas, overall, they describe the outlook skewed to the downside, taking factors into account including the raising of fixed term mortgage rates and possible raising of variable, affordability issues and inflationary pressure meaning people are saving less and therefore decreasing the chance of saving for a deposit, higher supply of stock in the market, and overall consumer sentiment less positive.

However, they also acknowledge that factors such as a return to migration, new rounds of incentives for first home buyers, and a generally strengthening economy with a low jobless rate and rising income growth – will assist to offset the downside risk.

If you have been thinking of selling, the right time could well and truly be now, as we are still in a cycle of growth, albeit at a reduced rate; the longer you wait the greater the chance that you will hit the market in a downward cycle, therefore not achieving the same price level as we could obtain in this current market.