Australian Property Market Update: Rising Home Values Amid a Slowing Market

The Australian property market has experienced an interesting shift in September, with a modest rise in home prices, but an overall slowdown in growth. According to the latest data from CoreLogic, national home values increased by just 0.4% in September, following similar trends observed in July and August. However, behind these figures lies a more complex picture, with some regions seeing significant price declines while others enjoy relatively stronger growth.

Key Highlights:

• Home Value Growth: A 0.4% increase in national home prices in September, continuing the steady rate of growth seen earlier in the quarter.
• National HVI: The national home value index (HVI) posted a 1.0% gain in Q3, the smallest quarterly increase since March.
• Diverging Trends: While cities like Melbourne, Canberra, Hobart, and Darwin experienced notable price declines, mid-sized cities such as Perth and Adelaide saw stronger growth, though at a slowing pace.

The Slowing Market: What's Driving the Trend?

CoreLogic's data reveals that while demand for housing remains high, a growing number of sellers are entering the market, causing a slight cooling effect on price growth. The increased competition, coupled with affordability challenges, is leading to a slower rate of sales and longer time on the market for listed properties.

• Increased Listings: New property listings are up 3.2% compared to last year, while total inventories have risen 8.8% over the past five years.
• Auction Clearances: The national auction clearance rate has dropped to around 60%, indicating that fewer properties are selling under the hammer.
• Time on Market: Homes are taking longer to sell, averaging 32 days on the market, compared to 29 days in June.

A Tale of Two Markets: Big Cities vs. Mid-Sized Growth

Among Australia’s major cities, Melbourne experienced the largest decline in home values, dropping 1.1% in the September quarter. This was followed by smaller declines in Canberra, Hobart, and Darwin. In contrast, Sydney saw a slight increase of 0.5%, although this is the smallest rise for the city since the beginning of 2023.

Meanwhile, mid-sized cities like Perth and Adelaide continued to grow, with Perth recording a 4.7% increase and Adelaide 4.0%. However, even these cities are not immune to the broader market slowdown, with growth rates decelerating as the year progresses.

Affordability Shaping Buyer Demand

Rising property prices and affordability concerns are driving a noticeable shift in buyer behavior. More Australians are opting for affordable housing options, especially in the bottom quartile of the market. Over the past year, home prices in the bottom 25% of the market have risen by 12.4%, compared to just 3.8% for homes in the top quartile.

In major cities, unit prices are also rising faster than house prices, a trend driven by both affordability and higher density housing demand.

Regional Market Outlook: Slower Growth Ahead

Australia’s regional housing markets are also cooling down after experiencing strong growth earlier in the year. Quarterly price gains have slowed from 2.3% in April to 1.0% in September. Despite this, regions such as Western Australia (+3.6%), South Australia (+2.3%), and Queensland (+2.0%) are still seeing faster growth compared to their urban counterparts.

What Does This Mean for You? Time to Strategize Your Next Move

The shifting market offers both opportunities and challenges. With rising listings and slower price growth, this could be an ideal time to enter the market or refinance your mortgage. However, making the right financial decisions requires expert guidance, especially as the market trends evolve.

At OM Financials, we’re here to help you navigate this dynamic property landscape. Whether you’re looking to buy, refinance, or invest, our team of experts is ready to craft a strategy that fits your goals.

Contact OM Financials today to take advantage of the current market and secure your future in property. Let’s turn these trends into opportunities for you!

Call us at: 0478-876-967