The fifth consecutive month of Australian property price growth came in spite of a fresh wave of listings, CoreLogic's latest report shows.
Sellers looking to beat the spring rush have been met with an uptick in buyer activity, helping to push values even higher in most capital cities.
Now that interest rates have been paused once again, is there room for more growth this spring selling season?
July saw the median Australian property price get another +0.7 per cent boost, bringing total gains for this growth cycle to +4.1 per cent.
Sydney's blazing run slowed, but the Harbour City still returned a strong +0.9 per cent uptick for the month, while Melbourne eased back to a modest +0.3 per cent.
Both Brisbane and Adelaide topped the capital cities with boosts of +1.4 per cent each, bringing Adelaide to a new all-time high. Perth delivered a healthy +1.0 per cent increase, too.
Prices in Hobart held flat in July and Canberra notched down by -0.1 per cent. Darwin remained relatively steady with +0.3 per cent growth.
The combined regional markets were again more subdued with a +0.2 per cent shift.
CoreLogic's head of research, Tim Lawless, noted that more entry-level properties are currently spurring on price growth.
"Some resilience in growth across the middle and more affordable end of the market aligns with housing finance data which has shown a stronger bounce back in the value of lending to first home buyers and investors over recent months," he said.
"These segments tend to be more active across the middle to lower end of the pricing range where competition to purchase a home may be more intense."
The severe shortage of listings that has persisted since September 2022 has been a key factor driving price growth this year as buyers have had little to choose from.
July finally saw that dam break to some degree. New listings rose above average levels as sellers looked to capitalise on rising home values.
CoreLogic's figures painted the picture of a particularly active winter, although total stock on the market remained far below the five-year average.
"With total stock levels still low and selling conditions reasonably strong, it may be the case that more homeowners are picking current market conditions as a good time to sell," Mr Lawless explained.
"The fact that total stock levels are still trending lower implies demand is keeping up with the increased flow of new listings coming to market."
He speculated that the rise in new listings could be attributed to a combination of sellers looking to beat the spring selling rush along with the possible signs of a rise in motivated sales due to the high interest rate environment.
"If we do see the volume of listings increase further, which is likely as we approach spring, that could take some further heat out of the market unless that is offset by a more substantial lift in active buyers."
The result of the RBA's August meeting likely had homeowners and buyers breathing a sigh of relief as the cash rate was paused for a second consecutive month.
Forecasts from Westpac, ANZ and CBA are now all aligned in the expectation that the current cash rate of 4.10 per cent is indeed the peak for the cycle. NAB still sees the chance of one further hike occurring in November.
All four big banks expect rates to start being cut back in the latter half of 2024.
Last year's property price correction was primarily driven by the rapid rate hiking cycle. The end of that cycle could help to add upward pressure to property values going forward.
"For the housing sector, the decision to hold interest rates over the past two months is positive news," Mr Lawless said.
"A growing expectation that interest rates have peaked, or are near a peak, should help to lift consumer sentiment from the recession-like lows that have persisted over the past nine months."
He concluded that "any lift in sentiment is likely to be accompanied by a rise in active buyers and sellers."
As the potential risk of further interest rate hikes seems to be easing, the big property question rests with listing levels as the spring selling season approaches.
"With an increase in the flow of fresh listings coming to market, we could gradually see the supply side becoming more balanced if housing demand doesn’t pick up at the same pace," Mr Lawless explained.
"To date, the rise in new listings has been absorbed, with total stock levels remaining well below average, but this will be a trend to watch."
CoreLogic's report notes that buyer demand is rising in tandem with growing listing rates, aided by significant levels of overseas migration and the ongoing shortage of newly built homes to help top up supply.
It also suggests that an influx of distressed sales hitting the market is looking less likely, in part due to interest rates settling and unemployment figures holding strong.
Overall it looks as though there's less risk of another price downturn and instead there may be solid opportunities for both buyers and sellers in the warmer months ahead.
This market update is written expressly for education purposes and content is based on the opinions of the authors or as otherwise cited. All information is current as at publication release and we take no responsibility for any factors that may change thereafter. Doorsteps Finance Pty Ltd ABN 27 648 541 879 and Doorsteps Solutions Pty Ltd ACN 654 334 246, the holder of Australian Credit Licence 537369 does not accept any liability or responsibility whatsoever to any error or omission or any loss or damage of any kind sustained by a person or entity arising from the use of this information. It does not constitute legal, tax or financial advice and you should always seek professional advice in relation to your individual circumstances.
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