Everything you need to know about the state of Australia’s property markets in 20 charts – April 2024

Key takeaways

CoreLogic estimates the combined value of residential real estate to be $10.3 trillion at the end of March.

National home values rose 1.6% in the March quarter, the largest quarterly increase since the three months to November (1.9%).

Despite an uptick in the quarterly growth trend, the annual growth trend ticked lower in March (8.8%), down 20 basis points from the 9.0% rise seen over the twelve months to February.

Growth in regional dwelling values has continued to outpace growth across the capitals for the third consecutive month, with regional values up 1.8% over Q1 compared to a 1.5% rise across the combined capitals.

Perth continues to lead capital growth performance in the greater capital city markets, with values up 5.6% in the three months to February and up 19.8% over the past year.

National sales activity continues to trend higher, with an estimated 48,793 sales in March, taking the annual count to 506,612. This is 6.0% higher than the numbers seen over the year to March 2022 (477,757) and 4.8% above the average annual volumes seen over the previous five years.

The time it takes to sell a home continued to trend slightly higher in March, with the median time on market rising to 36 days in Q1. While up from a recent low of 27 days in the three months to September, national selling times are still roughly in line with those seen this time last year (34 days).

National vendor discounting rates compressed through the year’s first quarter to -3.6%, down from -3.8% in December. Over the three months to March, capital city vendors were offered a median -3.1% discount to secure a sale, while regional vendors offered a larger -3.9% discount.

Following the usual season patterns, auction activity across the combined capitals trended higher through March, peaking in the week before Easter (March 24th, 3,519) with the busiest auction week in almost two years.

The additional auction numbers tested demand, with the capital city clearance rate continuing to trend lower through March, averaging 66.4% over the four weeks ending March 31st.

Australian rent values continued to trend higher in March, up 1.0% over the month and 8.6% over the year to March. The annual rental growth trend has been drifting upwards since October (8.1%), led by a re-acceleration in house rents, from 6.8% over the year to September 2023 to 8.4%.

Dwelling approvals continued to slide lower in February, with just 12,520 new dwellings approved. This was driven by a -20.8% decline in the more volatile unit segment, while house approvals rose 10.5% compared to January.

The value of new housing finance commitments rose 1.5% in February, led by a 4.8% increase in first-home buyer lending. Compared to the same time last year, new loan commitments were up 13.3% in February, with investor and first-home buyer financing up 21.5% and 20.7% year-on-year, respectively.

Want to know what’s happening to the housing markets around Australia?

Well… this monthly collection of charts from CoreLogic paints an interesting picture.

National home values rose 1.6% in the March quarter, the largest quarterly increase since the three months to November (1.9%).

The shortage of dwelling both for sale and for rent, at a time of skyrocketing population growth is going to continue throughout 2024.

And as buyers and sellers realise that we have reached a peak of interest rates and that inflation is coming under control and consumer confidence returns, buyer and seller activity will pick up.

So I currently see a window of opportunity to get into the property market before “the crowd” does.

Residential real estate underpins Australia’s wealth

• The total value of Australian residential real estate was $10.3 trillion at the end of March 2024.
• However, outstanding mortgages against all residential housing are only $2.3 trillion – a very comfortable 22% Loan to Value ratio.
• 56.2% of total Aussie household wealth is held in residential property – one of the many reasons neither the banks, the government nor the RBA wants a property crash.

National home values rose

• National home values rose 1.6% in the March quarter, the largest quarterly increase since the three months to November (1.9%).
• Despite an uptick in the quarterly growth trend, the annual growth trend ticked lower in March (8.8%), down 20 basis points from the 9.0% rise seen over the twelve months to February.
• Growth in regional dwelling values has continued to outpace growth across the capitals for the third consecutive month, with regional values up 1.8% over Q1 compared to a 1.5% rise across the combined capitals.
• However, our property markets are fragmented and while most segments growing, some are still languishing.

Our capital city markets are fragmented

The lower quartile across every capital city has recorded a stronger outcome for housing values relative to its upper quartile counterpart over the past quarter.

Perth has the largest gap between lower and upper quartile based on the change in dwelling values over the past three months, with a 2.2 percentage point difference, followed by Adelaide (1.6pp) and Brisbane (1.5pp).

Sydney and Melbourne have a 0.7pp difference, followed by Hobart and Darwin (0.6pp), while Canberra has the smallest growth gap (0.4pp).

The following chart shows how various segments of each capital city market are performing differently with median-priced properties performing well.

Each State is running its own race

• On the one hand, Perth property values are up 19.8% over the year and are now at a record high.
• On the other hand, Melbourne property values, decreased -0.2% over the quarter and are still -4.1% below the record high, which was in March 2022.

• And in the previous darling of the housing markets, Hobart, house prices are -11.5 % below their record highs recorded in March 2022.

Another star performer was Brisbane where property values increased 15.9% over the last year and are currently at a record high.

And Sydney property values which performed strongly over the past year (+9.6%) are now only -1.4% below their record high reached in January 2022.

Here’s how the Adelaide property market performed.

The Canberra housing market languished last year

Similarly, the Darwin housing market underperformed in the last year.

National sales activity continues to trend higher

• National sales activity continues to trend higher, with an estimated 48,793 sales in March, taking the annual count to 506,612.
• This is 6.0% higher than the numbers seen over the year to March 2022 (477,757) and 4.8% above the average annual volumes seen over the previous five years.

We’ve moved into a more balanced market

• The time it takes to sell a home continued to trend slightly higher in March, with the median time on the market rising to 36 days in Q1.
• While up from a recent low of 27 days in the three months to September, national selling times are still roughly in line with those seen this time last year (34 days).

Vendor Discounting

• National vendor discounting rates compressed through the year’s first quarter to -3.6%, down from -3.8% in December.
• Over the three months to March, capital city vendors were offered a median -3.1% discount to secure a sale, while regional vendors offered a larger -3.9% discount.

Auction activity across the combined capitals trended higher through March

We’re experiencing a rental market crisis in Australia

• Australian rent values continued to trend higher in March, up 1.0% over the month and 8.6% over the year to March.
• The annual rental growth trend has been drifting upwards since October (8.1%), led by a re-acceleration in house rents, from 6.8% over the year to September 2023 to 8.4%.

• With monthly rent increases outpacing increases in housing values, gross rent yields inched three basis points higher in March.
• At 3.75%, this is the highest national gross rental yield since October 2019 (3.77%).

Dwelling approvals and housing credit

• Dwelling approvals continued to slide lower in February, with just 12,520 new dwellings approved.
• This was driven by a -20.8% decline in the more volatile unit segment, while house approvals rose 10.5% compared to January.
• In order to meet the Government’s target of 1.2 million new homes within five years, monthly dwelling approvals need to be
  approximately 60% higher at 20,000 a month.

Finance and Lending

• The value of new housing finance commitments rose 1.5% in February, led by a 4.8% increase in first-home buyer lending.
• Compared to the same time last year, new loan commitments were up 13.3% in February, with investor and first-home buyer financing up 21.5% and 20.7% year-on-year, respectively.

• At $4.9 billion, the value of first-home buyer finance rose 4.8% in February to be 20.7% higher than the same time last year.
• The increase saw first-home buyers make up a larger portion of new owner-occupier finance, at 29.2%, well above the decade average of 24.5%.

Source of charts: CoreLogic Chart Pack, April 2024.

About Michael Yardney
Michael is a director of Metropole Property Strategists who help their clients grow, protect and pass on their wealth through independent, unbiased property advice and advocacy. He’s once again been voted Australia’s leading property investment adviser and one of Australia’s 50 most influential Thought Leaders. His opinions are regularly featured in the media.