In this article, Eliza Owen, Head of Residential Research Australia CoreLogic explains what’s in store for the property market this spring.
- House values growth is slowing
- Buyer demand remains high
- Past lockdown periods have been followed by an intense catch-up period once restrictions ease
Home value movements
Over the last 12 months, national housing values have increased 16.1%— the fastest pace of annual growth since February 2004, according to CoreLogic’s National Home Value Index. However, since March, the monthly national growth rate has slowed from 2.8% to 1.6% in July.
Across each of the capital cities, dwelling price appreciation is also trending downwards, with Sydney leading the way. Sydney’s monthly capital gain fell from 3.7% in March to 2.0% in July.
What’s the reason for this slowdown in monthly growth rates?
- Dwelling values are rising more in a month than incomes are growing in a year, making housing less affordable to more people.
- Some of the housing-related fiscal support that had been available during COVID has now ended.
What does this mean for spring buying?
Buyer demand is still high, in part because of record-low interest rates; there’s also a supply issue with active listings remaining about -26% below the five-year average.
Past lockdowns have seen a sharp decline in transaction activity but an intense catch-up period once restrictions ease.
The combination of buyer demand remaining high, the surges in demand as lockdowns end and prices slowing means the market is still incredibly competitive. There is plenty of opportunities to assist clients with finding their new dwellings.
As we see restrictions ease when vaccinations benchmarks are met, we can expect to see another surge in the property market.