July 15, 2024

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The Latest CoreLogic’s Home Value Index (HVI)

8 min read

Key takeaways

CoreLogic’s national Home Value Index rose 0.6% in November, the smallest monthly gain since the growth cycle commenced in February. However, Melbourne, Hobart and Darwin recorded declines in values over the month, and Sydney home values slipped into negative growth over the last week of the month.

These three cities continue to show low levels of advertised supply while purchasing activity is holding above-average levels, keeping strong upward pressure on housing values despite weaker housing market conditions across the lower eastern seaboard.

Slower growth conditions across the upper quartile of the market in Sydney and Melbourne have become increasingly prominent, with the broad middle of the market now recording the strongest rate of growth.

The gap between regional and capital city growth rates has converged, with both regions recording a 0.6% rise in values in November. Regional Australia’s housing values remain -1.8% below the historic high recorded in May 2022.

The rise in vendor activity since June has coincided with slower growth in home values. Total stock levels have been rising since July, indicating purchasing demand isn’t quite keeping pace with the rise in vendor activity.

The housing market is moving through a new inflection point, with the rate of growth in home values becoming more diverse, but generally weakening. The factors that have supported value growth are losing their potency, with advertised stock levels rising to above-average levels in some cities.

CoreLogic’s national Home Value Index (HVI) rose 0.6% in November, the smallest monthly gain since the growth cycle commenced in February.

Despite the slowdown, the national HVI reached a new record high in November.

Index Results As At 30 November

After falling -7.5% from a peak in April 2022 to a trough in January 2023, housing values have bounced 8.3% higher over the past 10 months, demonstrating a clear ‘V’ shaped recovery.

While the headline trends have slowed, multi-speed conditions have become increasingly evident across the capitals, with three cities recording a decline in values over the month.

These were Melbourne and Hobart, both down -0.1%, and Darwin, down -0.3%.

Growth in Sydney home values also slowed sharply, reducing to 0.3%, the smallest monthly gain through the recovery cycle to date.

Summary Ofhousing Values Through The Recent Cycles

With Sydney home values slipping into negative growth over the last week of the month, we could see Sydney following Melbourne’s lead, with home values stabilising or dipping lower in December.

On the flip side, Perth housing values accelerated in November, posting the largest monthly gain since March 2021 at 1.9%.

Rolling 3 Month Change In Dwelling Values State Capitals

Brisbane (1.3%) and Adelaide (1.2%) also stand out with a resilient and rapid pace of growth.

Change In Dwelling Values To End November 2023

These three cities continue to show remarkably low levels of advertised supply while purchasing activity is holding above-average levels.

This imbalance between available supply and demonstrated demand is keeping strong upward pressure on housing values across these markets, despite the downside factors leading to weaker housing market conditions across the lower eastern seaboard.

The Melbourne Cup day rate hike has clearly taken some heat out of the market, but other factors like rising advertised stock levels, worsening affordability and persistently low consumer sentiment are also acting as a drag on value growth in some markets.

Slower growth conditions across the upper quartile of Sydney and Melbourne have become increasingly prominent

The most expensive quarter of the market across both cities now recording the lowest rate of growth on a monthly and rolling quarterly basis.

The more expensive end of the market tends to lead the cycles in these cities.

As borrowing capacity reduces, we may be seeing more demand deflected towards lower housing price points, with the broad middle of the market now recording the strongest rate of growth in Sydney and Melbourne.

The gap between regional and capital city growth rates has converged

Both the combined capitals and combined regionals index recorded a 0.6% rise in values in November.

Rolling 3 Month Change In Dwelling Values Combined Capitals Vs Combined Regionals

The convergence comes after regional markets have lagged their capital city counterparts through the recovery phase to date.

While housing values across both of these broad regions found a floor in January, the combined capitals index has since increased by more than double the combined regionals index, up 9.6% and 4.3% respectively to the end of November.

Regional Australia’s housing values remain -1.8% below the historic high recorded in May 2022, with Regional Victoria (-6.7%) and Regional NSW (-5.5%) recording the largest shortfall from record levels.

A rise in vendor activity has played a key role in the housing slowdown

Vendor activity started to rise through early winter, which is seasonally unusual, following an extended period where new listings consistently tracked at below-average levels.

New Listings Rolling 28 Day Count Combined Capitals

The persistent lift in selling activity since June has coincided with slower growth in home values.

Total stock levels have been rising since July, indicating purchasing demand isn’t quite keeping pace with the rise in vendor activity.

Total Listings Rolling 28 Day Count Combined Capitals

Over the four weeks ending November 26th, advertised stock levels were above the previous five-year average in Hobart, Canberra, Melbourne and Sydney.

In these cities, market conditions are now in favour of buyers as higher stock levels provide more choice, less urgency and greater opportunities to negotiate.

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