Confidence across the property market is in full swing, with dwelling values posting another gain, and a higher one at that.
For the fifth straight month, the property market recorded a positive result as dwelling prices continued their ascent.
The CoreLogic National Home Value Index (HVI) grew by 0.8% in August, which represented an increase in momentum. The month prior, dwelling prices had increased by 0.7%.
Although this result shows slower growth than a few months ago - housing values grew by 1.2% in May and 1.1% in June respectively - the monthly uptick and nature of the six-month streak suggest that buyers are confident about the future direction of property prices.
What’s more, the market passed its first real test in August, as new listings picked up dramatically.
There is good reason to believe that some, if not most of this confidence has been underpinned by the Reserve Bank of Australia’s decision to pause its rate hike cycle.
The central bank has kept the official cash rate on hold at each of its last three meetings, and the commentary from RBA officials suggests we may be at, or near the peak rate level.
Capital Cities: Review
As we’ve seen over recent months, the recovery in the housing market is occurring across most parts of the country. In August, every capital city bar Hobart (down -0.1%) recorded an increase in dwelling values.
Brisbane led the way, with property prices up 1.5% over the month prior. That result indicated accelerating momentum after growth of 1.4% the month prior. It was followed by Sydney and Adelaide, where prices in each city grew by 1.1%.
In Perth, house prices increased by 0.9%, extending the city’s strong run. The next-best result was Darwin, where the local market recorded a modest price increase of 0.8%. Melbourne and Canberra round out the list with price growth of 0.5% and 0.3% respectively.
Overall Market: Review
Since it reached a ‘bottom’ back in February, the national Home Value Index has risen 4.9%. This corresponds with approximately $34,301 of price growth in terms of the median dwelling value.
In markets where advertised supply is higher than a year ago, such as Hobart and Canberra, the recovery is lagging.
Nonetheless, across the capital cities, house prices are faring better in their recovery than that of units, up 6.3% versus 4.9%. In the case of Sydney, this difference is even more pronounced.
Regional markets are seeing a more ‘patchy’ recovery as internal migration trends continue to ‘normalise’. In non-capital city regions of NSW and Victoria, property prices went backwards by -0.2% and -0.6% respectively.
However, the recovery in regional Queensland and regional South Australia was starkly different, with dwelling prices lifting 0.8% and 0.9% respectively.
Elsewhere, there are positive signs coming through from data on new listings. According to figures from Ray White, new listings increased by 9.4% in August, led by Sydney and Melbourne, but with month-over-month growth in every major city.
Historically, new listings tend to increase around spring, so there is some encouragement from the fact that this occurred during the back half of winter.
If listings growth continues over the coming months, the market will face a new test. However, for the time being, buyers have responded positively to the trend, and with the RBA increasingly looking like it could be done with its rate hike campaign, optimism seems to be the key narrative.