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Australian dwelling prices: another gain

April CoreLogic home value index: 0.7%mth; –8.4%yr. Broad picture continues to show stabilisation.

Read full report Australian dwelling prices April (PDF 157KB)

The CoreLogic home value index, covering the eight major capital cities, rose 0.7%mth in April, extending on a 0.8%mth gain in March to be up 1.4% over two months. That follows a sharp 9.4% drop over the previous nine months. The correction now looks to be clearly over for both prices and turnover. 

 

The latest gain comes despite interest rate rises in early 2023 and widespread expectations of further rate increases in the months ahead. Seasonality also looks to have flattered monthly gains which continue to be narrowly based coming off low levels of activity in terms of sales and listings. As such, this continues to look like the beginning of a stabilisation rather than a sustained upturn. 

 

Turnover remains fairly mixed, up about 2%qtr nationally on a rolling 3mth basis but down in the month and with Sydney and Melbourne still seeing consistent declines. Turnover is coming off a 30% drop over the last year and a half.  

 

Sydney recorded the strongest price rise with a 1.3%mth gain following on from March’s 1.4%mth lift. Seasonality again flattered the result a little, prices up 0.8-0.9%mth in seasonally adjusted terms over Feb-March. Note also that Sydney is coming off a much deeper correction, prices falling 13.8% over the year to Jan. The net decline is now closer to 11%. ‘Top’ and ‘middle tier’ houses continued to lead the way but with most broad segments still see gains of 0.9-1.5%mth. 

 

Melbourne posted a negligible rise of 0.1%mth, slight gains for ‘middle tier’ segments offset by slight declines for ‘top tier’ segments.  

 

Prices were a touch firmer in Brisbane, rising 0.3%mth, turnover also consolidating on what looks to be a solid bounce in March. Adelaide posted a 0.2%mth gain and are still up 1.3%yr. Likewise, Perth prices rose 0.5%mth to also be up 1.3%yr. (0.1%mth). In all markets, prices for ‘top tier’ houses remain notably softer, posting slight declines. 

 

Prices also look to be stabilising across some of the smaller capital cities: Hobart and Canberra both flat in the month but prices still declining 1.2%mth in Darwin (albeit about flat over the year). Across the regions, prices slipped 0.3% in regional NSW and 0.4%mth in regional Vic but posted a solid 0.8%mth rise in regional Qld (which includes the Gold and Sunshine Coasts).

 

Overall, while the nature of recent gains in Sydney is still unclear, the broader picture points to a clear stabilisation in prices in housing markets. Last week Westpac revised its 2023 housing outlook from a continued correction to a stabilisation (see here for more). The April batch of data is consistent with our revised view.   

 

Matthew Hassan, Senior Economist, Rea DCosta, Graduate.


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