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

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

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

Property prices across Australia have defied expectations, last year rebounding in the face of continued rate hikes last year and hitting new peaks in many areas.

The nation’s median home value made a full recovery in 2023 as the low supply of homes for sale and overall housing shortage put upward pressure on prices and rents.

However, signs of softer market conditions emerged late last year, when the pace of price growth and auction clearance rates eased – and that is expected to continue.

Just as 2023 defied the forecasts of all those economists and the media who predicted further price falls, 2024 will do better than the pessimistic predictions that have recently emerged.

The shortage of dwelling both for sale and for rent, at a time of skyrocketing population growth is going to continue into 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 December 2023. This has been increasing month after month throughout last year to reach a new peak.
• However, outstanding mortgages against all residential housing are only $2.2 trillion – a very comfortable 22% Loan to Value ratio.
• 56.7% 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.

Dwelling values continued to rise in December

• Both the combined capital city dwelling market and the regional dwelling market saw a rise of 1.5% in the December quarter.
• The growth trajectory for housing values across the combined capitals has broadly slowed since late May. However, the pace of growth remained relatively steady through the four weeks ending January 10th.
• The positive trend in capital city home sales is a symptom of persistently low levels of available housing supply running up against rising housing demand.
• Home values increased 8.1% in the 2023 calendar year, a strong turnaround from the -4.9% fall in 2022. However, annual growth was lower than in 2021, when home values increased 24.5%.
• However, our property markets are fragmented and while most segments growing, some are still languishing.

• National home values rose 1.5% in the three months to December, but values increased 8.1% in the year to December.
• As you can see from the table below, the pace of growth in capital city is outpacing regional Australia.

This is nothing new… the upper quartile of our housing markets has always been more volatile.

But this 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 15.2% over the year and are now at a record high.
• On the other hand, Melbourne property values, decreased -0.3 % in the month of December 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 -11.2% below their record highs recorded in March 2022.

Another star performer was Brisbane where property values increased 13.1% over the last year to record highs.

And Sydney property values which performed strongly over the year (+11.1%) are now -2.1% 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.

Sales volumes are trending a little higher than the historic monthly five-year average

• In the 2023 calendar year, CoreLogic estimates there were 488,898 sales nationally. This is -2.8% lower than in 2022.
• Aside from a seasonal drop off in December, sales volumes are trending a little higher than the historic five-year average nationally.

We’ve moved into a more balanced market

• The median time it takes to sell a capital city home was trending lower through 2023, but moved slightly higher in the December quarter.
• The median selling time for regional Australian dwellings is 41 days, which is up from 36 days a year ago, but remains well below the pre-COVID average.

Vendor Discounting

• Discounting rates also narrowed in 2023 as selling times reduced. Across the capital cities, the median vendor discount shrank from -4.3% in the December 2022 quarter to -3.5% in the December quarter of last year.
• Towards the end of last year, there was a slight deterioration in the median vendor discount.

Here’s how many properties are for sale at the moment

• In the four weeks to December 3, new listings totalled 38,012 nationally.
• New listings have begun a seasonal slowdown, however it is clear that the flow of new listings got much closer to the historic five-year average during the second half of 2023.

• At the national level, there were 160,757 listings observed over the four weeks to December 3.

• Total listings are gradually lifting off the back of a substantial rise in new listings, but remain -17.7% below the historic five-year average.

• Total listings appear to have seen a slight seasonal drop in the past four-week period.

Auction clearance rates confirm the turn in the property cycle

We’re experiencing a rental market crisis in Australia

• Australian rent values increased a further 0.6% in the month of December, taking the national annual increase to 8.3%.
• Annual growth in rent values has accelerated slightly, from the 8.1% increase recorded in the 12 months to October.

• Gross rent yields have moved slightly higher nationally in the past few months.
• This is due to the slight slowdown in the pace of capital gains against a slight uptick in rent value increases through the December quarter.

Dwelling approvals and housing credit

• Dwelling approvals increased 1.6% in November, driven by a 7.2% increase in the more volatile unit segment.
• Approvals trended a little higher over 2023, but remain relatively low overall.
• For the past six months, monthly dwelling approvals have averaged 13,760 a month, below the decade average of 17,254.

Finance and Lending

• The value of new housing finance secured through November rose 1.0%, to $27.6 billion, with growth slowing from a revised increase of 7.1% in October.
• Owner occupier finance increased 0.5%, largely driven by an increase in first home buyer, owner occupier lending of 2.8%.
• Investor housing finance rose 1.9% in the month.

• First home buyer finance currently comprises 29.4% of new owner occupier finance, which is well above the decade average of 24.3%.
• Queensland accounted for 73.3% of the lift in first home buyer finance through November, likely reflecting the temporary boost to the first home owner grant for new builds.

Source of charts: CoreLogic Chart Pack, January 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.