Growth cycle nears end as supply increases while buyer demand wanes
CoreLogic’s national Home Value Index (HVI) edged up by just 0.1% in November, marking the weakest monthly gain since January 2023 and signalling that Australia’s long-running housing market growth cycle could be nearing its end.
While the small rise represents the 22nd consecutive month of growth, CoreLogic’s research director Tim Lawless (pictured above) suggests a slowdown is underway.
“The downturn is gathering momentum in Melbourne and Sydney,” Lawless said. “The mid-sized capitals, which have dominated the growth cycle of late, are also losing steam.”
The CoreLogic report revealed a 0.4% November fall in housing values in Melbourne, marking a 2.3% decline over the past year. The city has recorded declines in 10 of the last 12 months. Sydney, meanwhile, appears to have reached its market peak in September. Values dropped 0.1% in October, followed by a steeper 0.2% decline in November.
Rolling quarterly data shows housing values have dropped in four of the eight capital cities. Melbourne led the declines (-1%), followed by Darwin (-0.7%), Sydney (-0.5%), and Canberra (-0.3%).
Perth continued to lead the nation in housing value growth, with a 1.1% increase in November and a 3% gain over the past three months. However, this was Perth’s weakest quarterly growth rate since April 2023, far below the 6.7% rise seen in the June quarter. Brisbane’s growth also slowed, with a quarterly rise of 1.8%, the lowest since March 2023. Adelaide recorded a 2.8% increase over the same period, its smallest quarterly gain since June.
Regional housing markets outperformed the capitals, with the combined regional index rising 1.1% over the past three months, compared to just 0.3% growth across the capitals.
However, performance varied significantly. Regional Victoria saw values fall 0.9% over the quarter, while other regional markets experienced modest growth. Regional Western Australia led with a 3.3% rise in housing values over the period.
Housing supply has increased as vendor activity picked up during the spring selling season. Over the four weeks to November 24, capital city property listings were up 16% compared to the end of winter. Perth and Adelaide saw the largest increases, with advertised stock levels rising 33% and 25%, respectively. Despite these gains, total listings remain well below average in both cities.
Sydney and Melbourne are exceptions, with listings now 10.4% and 9.1% higher than their respective five-year averages, reaching their highest levels for this time of year since 2018.
At the same time, buyer activity is slowing. CoreLogic estimates that capital city home sales over the past three months are down 4.6% compared to the same period last year and 2% below the five-year average. Sydney recorded the sharpest decline, with sales down 15.4% year-on-year and 15.1% below the five-year average.
With rising supply and weaker demand, selling conditions have deteriorated. Auction clearance rates across the combined capitals have remained below 60% since mid-October, and private treaty sales are taking longer to finalise.
“The mid-sized capitals and most of the regional ‘rest of state’ markets continue to provide some support for growth in the national index, but it is clear momentum is also leaving these markets,” Lawless said.
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