Everything you need to know about the state of Australia’s property markets in 20 charts – February 2024

Want to know what's happening to the housing markets around Australia?

Well... this monthly collection of charts from CoreLogic paints an interesting picture.

Property prices across Australia defied expectations last year rebounding in the face of continued rate hikes last year and hitting new peaks in many areas.

The nation’s median home value made a full recovery in 2023 as the low supply of homes for sale and overall housing shortage put upward pressure on prices and rents.

However, signs of softer market conditions emerged late last year, when the pace of price growth and auction clearance rates eased – yet Australia’s housing markets are off to a strong start in 2024, with easing inflation and the prospect of an earlier than expected rate cut buoying vendor hopes and buyer appetites for property.

Just as 2023 defied the forecasts of all those economists and the media who predicted further price falls, I believe 2024 will do better than the pessimistic predictions that have recently emerged.

The shortage of dwelling both for sale and for rent, at a time of skyrocketing population growth is going to continue into 2024.

And as buyers and sellers realise that we have reached a peak of interest rates and that inflation is coming under control and consumer confidence returns, buyer and seller activity will pick up.

So I currently see a window of opportunity to get into the property market before "the crowd" does.

Residential real estate underpins Australia's wealth

• The total value of Australian residential real estate was $10.3 trillion at the end of January 2024. This has been increasing month after month throughout last year to reach a new peak.
• However, outstanding mortgages against all residential housing are only $2.2 trillion - a very comfortable 22% Loan to Value ratio.
• 56.7% of total Aussie household wealth is held in residential property - one of the many reasons neither the banks, the government nor the RBA wants a property crash.

Dwelling values still rising at the start of the 2024 season

• National home values rose 1.0% in the three months to January, the smallest quarterly increase since the March quarter of 2023 (1.0%).
• Despite the easing in quarterly growth, home values increased by 8.7% over the year to January, the highest annual increase since the year to June 2022 (10.8%).
• Capital city dwelling values rose 1.0% over the three months to January. Regional dwelling values are now rising at a faster pace compared to the capitals, increasing 1.2% over the same period.
• However, our property markets are fragmented and while most segments growing, some are still languishing.

Our capital city markets are fragmented

But, as mentioned previously, within each state our housing markets are fragmented, and the more expensive sectors of the market which led to the downturn initially led to the upturn last year.

This is nothing new... the upper quartile of our housing markets has always been more volatile.

The following chart shows how various segments of each capital city market are performing differently with median-priced properties performing well.

Each State is running its own race

• On the one hand, Perth property values are up 16.7% over the year and are now at a record high.
• On the other hand, Melbourne property values, decreased -0.1 % in the month of January and are still -4.2% below the record high, which was in March 2022.

• And in the previous darling of the housing markets - Hobart - house prices are -12.0% below their record highs recorded in March 2022.

Another star performer was?Brisbane where property values increased 14.8% over the last year and are currently at a record high.

And Sydney property values which performed strongly over the past year (+11.4%) are now -2.4% below their record high reached in January 2022.

Here's how the Adelaide property market performed.

The Canberra housing market languished last year

Similarly, the Darwin housing market underperformed in the last year.

Sales volumes are trending a little higher than the historic monthly five-year average

• CoreLogic estimates there were 28,917 sales in January taking the national annual count to 499,162 .
• This is roughly in line with the numbers seen over the year to January 2023 (496,926) and 3.6% above the average annual volumes seen over the previous 5 years.

We've moved into a more balanced market

• The time it takes to sell a home continued to trend higher in January, thanks in part to the seasonal slowdown in sales activity.
• Over the three months to January, the median selling time for a capital city dwelling was 29 days, while the median selling time in regional Australia was 44 days.

Vendor Discounting

• Capital city discounting rates also deepened slightly in January as selling times increased.
• Across the combined capital cities, the median vendor discount increased seven basis point to 3.53%, taking it back in line with the discounts being offered over the three months to July.

Auction clearance rates confirm the strong start for 2024

• The 2024 auction market started strong, with the combined capitals clearance rate shifting significantly higher compared to the final weeks of 2023 when the clearance rate fell below 60%.
• Over the week ending 4 February, 68.3% of the 1,712 auctions held were successful.
• We update the weekly auction clearance results here each week.

We're experiencing a rental market crisis in Australia

• Australian rent values increased a further 0.8% over the month of January up from the 0.6% increase recorded in December.
• This uptick has seen annual growth in rent values accelerate slightly, from the 8.1% lift seen over the year to October 2023, to 8.3% in January.

• Gross rent yields inched higher 2 basis points higher to 3.73% in January, with monthly increases in rents outpacing increases in housing values.

Dwelling approvals and housing credit

• Dwelling approvals dipped -9.5% in December.
• This was driven by a -22.4% decline in the more volatile unit segment, while house approvals were relatively stable, dropping just -0.6%.
• While Approvals had trended a little higher through 2023, monthly approvals remain well below the previous decade's average.

Finance and Lending

• The value of new housing finance secured through December declined -by 4.1%, to $26.3 billion.
• This fall was largely driven by a -5.5% drop in first-home buyer financing, while investor housing finance decreased by 1.3%.
• While down over the month, December’s secured financing results were up 11.7% compared to December 2022.

• The value of first home buyer finance fell -5.5% in December.
• Around a third of the decline was driven by Queensland, following an unusual uplift in November, which was likely in response to the introduction of a temporary boost to the first home owner grant.

Source of charts: CoreLogic Chart Pack, February 2024.