Rate of housing market recovery slows

by Madison Utley05 Feb 2020

The housing value rebound in Australia has continued into 2020, with the CoreLogic national home value index showing a slight increase over the first month of the year.

While the index was up by just 0.9%, the uptick took the annual growth rate to 4.1% – the fastest pace of growth for a twelve-month period since December 2017.

Further, housing values rose across every capital city and rest-of-state region, excepting regional South Australia.

According to CoreLogic head of research Tim Lawless, these results indicate the recovery trend which began in Sydney and Melbourne in mid-2019 is spreading to other areas of the country.

However, the unexpected speed with which the housing recovery began has lost some momentum, slowing from a monthly peak of 1.7% in November to 0.9% in January.

“The latest results indicate a reduction in the speed of growth across most markets, especially for Sydney and Melbourne where affordability constraints are once again becoming more pressing. As advertised stock levels rise over the early part of the year, we could some further dampening of growth rates," said Lawless.

“Seasonal factors deliver a reduction in sales activity, auction markets become quieter and listing numbers drop sharply. Through February, we will receive a much better feel for housing market trends as activity returns to normal."

In capital cities, house prices rose by 1.1% and apartment prices lifted by 0.4%, with dwelling prices increasing in value by 5.2% over the year to January.

In regional areas, home prices rose by 0.7% in January; over the year, values were up 0.4%.

In the first month of 2020, the average price of a home in an Australian capital city was $663,844 and the average unit price was $572,374.

Prices rose across all eight capital cities in January, with Melbourne up 1.2%, Sydney 1.1%, and Hobart 0.9%. Brisbane came in middle of the road, showing a 0.5% increase. At the lower end of the pack, Canberra showed a 0.3% increase, Adelaide 0.2%, and Perth and Darwin both just 0.1%.

Year on year, home prices were higher in six of the eight capital cities in January, with Darwin (down 8.1%) and Perth (down 5.7%) proving the outliers.