Forget about all those doomsayer predictions on the outlook of the Australian housing market. New all-time highs are within sight.
Although home prices were revised lower for the second month running, with September’s reading fine-tuned to a rise of 0.7% for the month, it was the headline result for October that stole the show.
Once again, the signs are positive for homeowners. Prospective buyers on the other hand, may be left waiting at the altar again.
Throughout October, CoreLogic’s National Home Value Index (HVI) recorded an increase of 0.9%.
That made it nine from nine in terms of positive results for the national housing market. It also draws a clear line in the sand as far as the downturn that is now well and truly behind us.
Why’s that?
Because national dwelling values ended the month sitting just half a percent off the all-time highs recorded back in April, 2022.
All up, it’s taken about 18 months, but the housing market is more or less ready to set a new record.
The momentum may be there, but with growing signs the Reserve Bank of Australia may not have done enough to quash inflation, it’s hard to predict what follows next.
And behind the impressive numbers making the headlines, there are even some headwinds starting to emerge that all observers should be aware of.
Let’s take a look at last month’s action across the property market.
Capital Cities: Review
Dwelling values increased across each of the capital cities except Darwin, where prices were lower by -0.1% for the month.
But the major story was Perth, where property values surged by an impressive 1.6% versus the month prior. That was notably higher than the September result, when prices grew by 1.3%.
Next up were Brisbane and Adelaide, where dwelling values rose by 1.4% and 1.3% respectively. Both of these cities have seen strong movements across recent months, and they, along with Perth, have become the driving force for the local market, skewing the averages higher.
After a series of negative results, Hobart finally posted a month of higher property prices, up 0.8% month-over-month.
That result was on par with the nation’s biggest market, Sydney, where price growth moderated from 1.0% in September.
One of the major laggards remains Melbourne, with the capital struggling to find any sort of meaningful traction over recent months amid a spate of new taxes targeting property investors. Nonetheless, the result was a modest improvement on the 0.4% growth recorded a month prior.
Last but not least, Canberra was at the back of the pack for the second month running. Prices rose by just 0.1%, shrinking from a growth rate of 0.2% in September.
Overall Market: Review
Based on recent growth rates, the national property market should set a new record high by the middle of this month. That would see the market back in an upswing, having fallen as much as -7.5% from peak to trough.
Looking forward, it remains to be seen whether the market can sustain the accelerating momentum witnessed across the last few months.
For starters, there has been a major increase in new listings coming to market. Broader consumer sentiment still remains low, and the Reserve Bank of Australia has a lot more work to do in order to bring down inflation to its target range.
Many property buyers have been complacent about monetary policy, but recent events indicate that there is still great risk surrounding interest rates.
In the regions, there are still signs of bustling growth, albeit at a slightly cooler rate than that of the capital cities.
During October, with the exception of regional Tasmania, every rest of state region saw home values increase.
As is the case for Adelaide, Perth, and Brisbane, the regional markets for South Australia, Western Australia, and Queensland were all tracking at record highs.
It’s all eyes on the RBA.
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