Dwelling values increased yet again, but growth is slowing as listings come online.
rising house prices, the CoreLogic National Home Value Index (HVI) rose 0.7% throughout July.
This result confirms the local property market remains in an uptrend, however, growth has slowed over recent months, slipping from growth of 1.2% in May, and 1.1% in June.
The figures point to strong demand, however, with property listings now starting to increase, the real test will emerge over the coming months.
And with the Reserve Bank of Australia now holding steady on the official cash rate for the second month in a row, property buyers and sellers now have another variable to price into their decision-making as we could be near an end to the central bank’s monetary tightening campaign.
Capital Cities: Review
There were mixed results across the nation’s capital cities.
Having been at the epicentre of the rebound in the housing market, Sydney’s dwelling prices may still be growing, but the pace of growth has dropped significantly.
Growth in Sydney’s property prices was 1.8% in May, but last month that had dropped to just 0.9% as the market cooled. New listings were the driving factor for this result, with new listings in Sydney up 9.9% year-over-year, and nearly 20% versus the prior five-year average.
Elsewhere, the likes of Brisbane and Adelaide recorded an increase in price growth. Dwelling values accelerated across both cities by 1.4% in July, which was more than any other capital city.
The next-best result came from out west, with Perth recording a monthly rise in dwelling values to the tune of 1.0%.
In Melbourne, property prices eked out growth of 0.3%, which was comparable with the performance of Darwin’s local property market.
Rounding things out, Hobart values were unchanged versus a month prior, and Canberra found itself the only capital city to record a decline in dwelling values last month. Property prices in the nation’s capital fell -0.1% throughout July.
Overall Market: Review
At a national level, property market prices remain approximately -5.3% below the peak recorded in April 2022, just before the Reserve Bank of Australia began hiking interest rates.
However, several sub-markets like Perth and Adelaide recorded new all-time highs for dwelling values. These results mitigated the overall drop, while helping the market gain approximately 4.1% since recording a ‘bottom’ in February.
By and large, it is the upper quartile of the market driving activity. A modest deceleration in price growth within this segment of the market has had the most impact across the national market, but the gains across recent months are far more telling as shown below. The more affordable end of the market has shown less volatility in month-to-month growth.
While new listings would typically reduce through winter, the opposite was observed in July. During this period, new listings in the capital city markets increased by 3.9%. If this trend persists, there is reason to believe price growth may continue to moderate, or dwelling prices could even go into reverse.