According to CoreLogic’s Home Value Index (HVI), Australian home prices have maintained their upward but steady trend, rising by 0.7% in June to record the 18th consecutive month of price increases.
Australia’s median house value, which is at $794,000., increased by $59,000 during the 2023–2024 fiscal year, representing an 8% growth in values.
The “stark contrast” between the national index and FY22–23, which saw the index decline by 2% in a year that witnessed a 7.5% decline in values after the start of the monetary policy tightening cycle in May 2022, was highlighted in the HVI study.
Despite the substantial yearly increases, the trend growth rate has subsequently started to decline, having fallen from the quarterly top of 3.3%.
Actually, for the previous three quarters, the pace of price rise has been mostly stable. In the June quarter of 2024, values increased by 1.8%, after comparable outcomes in the March and December quarters (1.9% and 1.8%, respectively).
The national index has “found a groove,” increasing by 0.5% to 0.8% every month since February of this year, according to CoreLogic’s analysis.
Despite several negative factors, such as high interest rates, pressure from the rising cost of living, difficulties with affordability, and strict lending policies, the expansion has continued.
“The resilience of the housing market is attributed to the tight supply levels that continue to drive up prices.”
PropTrack’s Home Price Index increased by 0.18% in the meanwhile, setting a new record in June even though this was the slowest monthly growth rate since December 2022.
However, since the December 2022 low, prices have increased by 10.14%, rising 3.14% year to date to sit 6.55% above June 2023 levels.
Even with an increase in the number of properties coming up for sale this year, the demand for housing has been supported by robust population growth, competitive rental markets, and advances in home equity.
In the meanwhile, development activity is still difficult, which makes the ongoing housing scarcity worse due to a dearth of new builds.
Even though borrowing rates have remained stable, many people are driven to “overcome affordability challenges and transact with the expectation of further growth” by the continuous increase in property prices.
Demand is therefore exceeding supply, driving up prices and rents and counteracting the environment of increasing interest rates.
“Starting in July, tax cuts will increase household earnings, which will expand consumers’ budgets and borrowing capacity and further encourage price increases.
“Despite expectations of growth soon, home prices are expected to rise more slowly through the seasonally quieter winter months, especially given the growing uncertainty surrounding interest rates.”
For more, read our expert insights.
For a free consultation call at 1300 GET LOAN to go over your alternatives in this changing market, get in touch with Nfinity Financials.
