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Property prices rise towards peak levels in September

November 2, 2023
Andy Webb

Property prices rise towards peak levels in September

Australian home values are heading towards all-time highs once again after another strong month according to CoreLogic's latest report.1 

A heated spring selling season saw strong price growth in the five biggest capital cities, although there are still some mixed results elsewhere. 

Find out whether this year's surprising recovery can continue. 

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National home values: September 2023

Australia's median property price rose another +0.8 per cent in September, bringing total gains for the year to +6.3 per cent. 

That brings the national median to within +1.3 per cent of the peak recorded in April 2022.

September brought another month of strong price gains. Source: CoreLogic

Sydney's standout run continued with +1.0 per cent growth in September and Melbourne edged forward with another +0.4 per cent gain. 

Brisbane prices rose +1.3 per cent, putting the city within touching distance of its record high, while Adelaide and Perth hit new peaks with +1.7 per cent and +1.3 per cent respectively. 

Darwin and Canberra held close to flat and Hobart recorded the only monthly loss of -0.6 per cent. 

Regional markets maintained a more gradual pace than their capital city counterparts with a combined rise of +0.4 per cent. 

The national median is expected to hit a new all-time high by the end of November, CoreLogic's research director Tim Lawless explained. 

"We have already seen dwelling values reach new record highs in Perth and Adelaide," he said.

"Brisbane looks set to reach a new record high in October, with home values currently only 0.6 per cent below their previous peak."

Listings are rising in some markets while others remain tight

In Sydney and Melbourne, winter saw new listings finally begin to climb from deep lows, and that trend has continued into the spring. 

Sellers have returned to the market in spring but not in every state. Source: CoreLogic

Hobart and Canberra have followed suit; total available stock in both cities, plus Melbourne, is sitting at above-average levels. 

The opposite is happening in Brisbane, Adelaide and Perth where total listings are around -40 per cent down on the five-year average. 

A broad shortage of homes for sale is helping to keep prices on the incline. Source: CoreLogic

Nationally, the number of home sales was +6.3 per cent higher than the five-year average, though sales volumes have dipped since the June quarter. 

“Housing affordability is still relatively stretched and is getting worse as home values continue to rise," Mr Lawless said.

"High interest rates make it harder to qualify for credit, especially when considered alongside high cost of living pressures and the three percentage point serviceability buffer."

He added that buyers in markets where listings had risen were enjoying more choice — "and more choice means less urgency, more time to deliberate on the purchase and negotiate with the vendor."

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'Softer conditions' for regional markets, though prices are still rising

Compared to some of the explosive growth seen in some capital cities in 2023, movements have been more measured in regional markets. 

The combined regions saw a +0.4 per cent uplift in September with mixed results between the states. 

Regional prices are still broadly rising but some states are struggling. Source: CoreLogic

On a quarterly basis, relatively strong growth has been seen in South Australia, Queensland and Western Australia. 

Things have been a bit slower in NSW, Victoria and Tasmania which are each still recording price declines on an annual level. 

The market recovery has been more gradual in regional areas. Source: CoreLogic

Mr Lawless pointed out that listings are broadly below average in the regions but sales are also down. 

"Softer housing conditions across regional Australia looks to be more demand-driven, with the estimated number of home sales 6.5 per cent lower than a year ago and 9.2 per cent lower relative to the previous five-year average," he said. 

Even so, 2023 has seen property prices rise +2.6 per cent over 2023 so far in the combined regions.

What's ahead for the Australian property market?

Even though listings are rising in some parts of the country, CoreLogic expects the median Australian property price to hit a new all-time high by the end of November. 

Almost a third of the country is already at peak levels according to their regional subdivisions, and future indicators look positive for further growth. 

Buyers are still being restricted to some degree by challenging barriers to entry into the property market. 

"A rise in consumer sentiment, a drop in interest rates or an easing in credit constraints would all be factors supporting a rise in purchasing activity. However, we haven’t seen any evidence of these events occurring," the report read.

Even so, record population growth is underpinning demand at a time when approvals for new builds are at the lowest levels since 2013, so fresh supply should continue to be limited. 

"While an undersupply of housing is clearly negative, insufficient levels of housing are likely to support housing values over the medium term."

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1. CoreLogic News, Home Value Index up 0.8% in September as demand/supply imbalance continues to push values higher', 2 October 2023

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This blog provides educational content and reflects the opinions of the authors or cited sources. The information is current at the time of publication, and we are not responsible for any changes that may occur afterward. Doorsteps Finance Pty Ltd and Doorsteps Solutions Pty Ltd are not liable for errors, omissions, or any losses resulting from the use of this information. It does not constitute legal, tax, or financial advice, so please seek professional advice for your specific circumstances.

Property reports contain property estimate data and information from RP Data Pty Ltd (trading as CoreLogic Asia Pacific ABN 57 087 759 171) and OpenAgent Pty Ltd, but they are not professional property valuations or advice. The actual market value of the property may differ. We and CoreLogic do not guarantee the accuracy, currency, or completeness of the data and information, and we exclude all liability for any loss or damage arising from its use. You rely on the property estimate at your own risk."

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