This week’s Australian Property Market Update

Key takeaways

Our property markets are continuing to rise, but more slowly than earlier in the year.

CoreLogic estimates the combined value of residential real estate rose to $10.95 trillion at the end of August. I remember when it hit $9 trillion before the pandemic and everyone was excited.

There were 2,697 auctions held across the capitals last week, the highest volume of homes taken under the hammer since the week leading into Easter (3,519).

Based on results collected so far, 68.2% of auctions were successful, which is the second lowest preliminary clearance rate so far this year after the week ending June 9th (King’s birthday long weekend in some states and territories), when the preliminary clearance rate came in at 67.3%.

This week, CoreLogic Research reports that:

Sydney property prices increased 0.1 over the last week, also increased 0.4% over the last month and are 4.6% higher than they were 12 months ago.

Melbourne property prices remained flat over the last week, fell -0.1% over the last month, and are -1.3% lower compared to 12 months ago.

Brisbane property prices increased by 0.1% over the last week, increased 0.8% over the last month and are 14.6% higher than they were 12 months ago.

Overall, Australian capital dwelling prices increased by 0.5% over the last month and are now 7.1% higher than they were 12 months ago.

And it’s likely property prices and rents are going to keep increasing throughout 2024.

This current property cycle has been driven by an undersupply of good properties relative to current demand pushing up property values and rents there was nothing to suggest there will be any significant change in the near future.

Unfortunately, the undersupply properties is going to persist for some time with all commentators agreeing that there is no way we’re going to hit the housing construction targets required to meet our demand.

The Reserve Bank is set to keep the cash rate on hold at the end of its meeting on Tuesday, 24th September.

This will mean Australia will have a cash rate of 4.35% for a full 12 months, with the next board meeting not until 4-5 November 2024.

The market is, however, still divided on the timing of any rate relief with Australia’s largest lender, CBA last week pushing back its forecast for the first cut by one month to December 2024.

The major banks’ current cash rate forecasts are as follows:

CBA: first cut in December 24, 5 cuts in total down to 3.10%
Westpac: first cut in February 25, 4 cuts in total down to 3.35%
ANZ: first cut in February 25, although later is possible, 3 cuts in total down to 3.60%.
NAB: first cut in May 25, although February is possible, 5 cuts in total down to 3.10%

The Reserve Bank Housing Loan Payments data reveals borrowers were charged an estimated $14.5 billion on their scheduled mortgage repayments in June.

A significant proportion – 66% – of these repayments were interest charges.

Scheduled monthly repayments have collectively increased by an estimated $5.5 billion compared to March 2022 when an estimated $9 billion was charged

New research from Canstar shows the first rate cut alone could bring $92 in monthly repayment relief for those with a $600,000 loan or as much as $153 for borrowers with a $1 million mortgage, assuming they have 25 years remaining.

As many as five rate cuts cumulatively could see monthly repayments on a $600,000 plummet by $441 or $736 for a $1 million loan.

On the auction front… 2,697 auctions were held across the capitals last week, the highest volume of homes taken under the hammer since the week leading into Easter (3,519).

Last week’s auction volume was up 13% on the week prior and was the fifth busiest week so far this year.

According to CoreLogic, preliminary clearance rates weakened on the back of high auction volume last week

See Corelogic’s full auction report below.

This week, CoreLogic also reports that:

Sydney property prices increased 0.1 over the last week, also increased 0.4% over the last month and are 4.6% higher than they were 12 months ago.
Melbourne property prices remained flat over the last week, fell -0.1% over the last month, and are -1.3% lower compared to 12 months ago.

Brisbane property prices increased by 0.1% over the last week, increased 0.8% over the last month and are 14.6% higher than they were 12 months ago.

Overall, Australian capital dwelling prices increased by 0.5% over the last month and are now 7.1% higher than they were 12 months ago.

Clearly, the property cycle is moving on but our markets are very fragmented.

Source: CoreLogic September 23rd 2024

Of course, these are “overall” figures – there is not one Sydney or Melbourne or Brisbane property market.

And various segments of each market are performing differently.

At the beginning of this cycle the upper quartile of the market lead the upswing but now 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.

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

To help keep you up-to-date with all that’s happening in property, here is my updated weekly analysis of data and charts as of 23rd September 2024 provided by SQM Research, CoreLogic, and realestate.com.au.

Current property asking prices

Property asking prices are a useful leading indicator for housing markets – giving a good indication of what’s ahead.

Here is the latest data available:

Sydney

Property type	Price ($)	Weekly Change	Monthly Change %	Annual % change
All Houses	1,900.379	0.616	-0.6%	2.3%
All Units	822,850	5.645	0.2%	9.1%
Combined	1,464,481	2.650	-0.4%	3.5%

Source: SQM Research

Melbourne

Property type	Price ($)	Weekly Change	Monthly Change %	Annual % change
All Houses	1,236,135	0.365	-0.3%	3.2%
All Units	608,018	-0.618	-0.3%	3.2%
Combined	1,039,089	0.057	-0.3%	3.7%

Source: SQM Research

Brisbane

Property type	Price ($)	Weekly Change	Monthly Change %	Annual % change
All Houses	1,179,105	10.130	2.9%	19.2%
All Units	648,326	4.774	0.5%	21.2%
Combined	1,046,560	8.792	2.5%	19.3%

Source: SQM Research

Perth

Property type	Price ($)	Weekly Change	Monthly Change %	Annual % change
All Houses	1,075,399	-0.499	2.5%	26.2%
All Units	565,124	5.387	1.9%	24.2%
Combined	942,314	1.036	2.4%	25.7%

Source: SQM Research

Adelaide

Property type	Price ($)	Weekly Change	Monthly Change %	Annual % change
All Houses	959,043	4.656	2.6%	22.7%
All Units	469,833	-3.533	0.3%	10.3%
Combined	871,221	3.186	2.4%	21.3%

Source: SQM Research

Canberra

Property type	Price ($)	Weekly Change	Monthly Change %	Annual % change
All Houses	1,154,930	-6.693	-3.5%	7.0%
All Units	593,386	3.989	1.0%	-1.3%
Combined	949,308	-2.782	-2.5%	4.6%

Source: SQM Research

Darwin

Property type	Price ($)	Weekly Change	Monthly Change %	Annual % change
All Houses	667,868	6.132	3.3%	-2.1%
All Units	383,489	-0.106	0.5%	1.9%
Combined	556,208	3.683	2.5%	-1.1%

Source: SQM Research

Hobart

Property type	Price ($)	Weekly Change	Monthly Change %	Annual % change
All Houses	776,080	-8.626	-1.3%	-4.0%
All Units	490.645	0.809	0.1%	0.6%
Combined	732,946	-7.200	-1.2%	-3.6%

Source: SQM Research

National

Property type	Price ($)	Weekly Change	Monthly Change %	Annual % change
All Houses	936,082	0.498	0.5%	8.3%
All Units	560,176	1.785	0.5%	9.3%
Combined	855,366	0.774	0.5%	8.3

Source: SQM Research

Cap City Average

Property type	Price ($)	Weekly Change	Monthly Change %	Annual % change
All Houses	1,388,163	6.254	0.1%	7.2%
All Units	698,713	6.423	0.7%	9.4%
Combined	1,184,552	6.304	0.2%	7.4%

Source: SQM Research

The value of property asking prices as a leading indicator for housing markets is quite significant.

In fact it’s more valuable than median prices which can be quite misleading.

Let’s delve into why this is the case and how it impacts the real estate market.

Early Market Sentiment Indicator: Asking prices often reflect the current sentiment of sellers in the real estate market.
If sellers are confident, they might set higher asking prices, anticipating strong demand.
Conversely, if sellers are uncertain or perceive a market downturn, they might lower their asking prices to attract buyers.
This makes asking prices a real-time indicator of market sentiment, often preceding changes in actual sales prices.
Predictive of Future Price Trends: Trends in asking prices can be predictive of where the actual property prices are headed.
For example, a consistent rise in asking prices over a period can signal an upcoming rise in transaction prices.
Impact of Economic Factors: Economic factors such as interest rates, employment rates, and broader economic health influence asking prices.
For instance, changes in the Reserve Bank of Australia’s policies or shifts in the job market can quickly reflect in the asking prices, providing insights into how these factors are influencing the housing market.
Regional Variations: In a diverse market like Australia’s, asking prices can also provide insights into regional disparities.
For instance, the property markets in Melbourne and Sydney might behave differently from those in Brisbane or Perth. Asking prices can give early indications of these regional trends.
Influence of Supply and Demand: Asking prices are also a response to the balance of supply and demand in the market.
In areas with limited supply and high demand, asking prices tend to be higher and vice versa.

However, it’s important to note that while asking prices are a valuable indicator, they should not be used in isolation.

Other factors like actual sales prices, time on the market, auction clearance rates, and economic conditions also play crucial roles in understanding the property market dynamics.

READ MORE: The latest median property prices in Australia’s major cities

Last weekend’s auction report

Preliminary clearance rates weakened on the back of high auction volume last week

There were 2,697 auctions held across the capitals last week, the highest volume of homes taken under the hammer since the week leading into Easter (3,519).

Melbourne hosted the largest volume of auctions, with 1,274 homes taken under the hammer.

68.3% of auctions have recorded a successful result so far, roughly on par with the previous week (68.5% which revised down to 61.3% on final numbers).

Sydney held its second busiest week of the year so far (after the week leading into Easter at 1,199), with 995 auctions held across the city.

70.3% of the results collected so far have returned a successful result, down slightly from the previous week’s
preliminary clearance rate of 70.6%, which was revised down to 63.2% once finalised.

Adelaide recorded the most auctions across the smaller capitals, with 206 homes taken to market, recording a preliminary clearance rate of 74.6% (lowest since the week ending August 4th at 66.7%).

Brisbane held the second-highest volume of auctions last week, with 134 homes taken under the hammer.

At 56.8%, last week’s preliminary clearance rate was the lowest since midDecember last year.

ACT recorded a preliminary clearance rate of 48.6%, on par with the week ending August 4th as the lowest early success rate so far this year.

The number of auctions is set to drop substantially this week due to the AFL grand final long weekend, with around 1,930 capital city homes currently scheduled to go under the hammer.

Melbourne has around 250 homes scheduled for auction compared to nearly 1,300 auctions in Sydney.

Our rental markets

The national CoreLogic hedonic rent index was unchanged for a second consecutive month in August, and rent values declined in Sydney for a second consecutive month.

Nationally, rent values were up 7.2% in the year to August, which is the lowest annual growth rate since May 2021.

Annual rent growth is now slowing in every capital city market, except for Hobart, which is coming off a dip in rent values through 2023.