Everything you need to know about the state of Australia’s property markets in 20 charts – December 2023
Key takeaways
The value of residential real estate increased to an estimated $10.3 trillion at the end of November, up from $10.2 trillion in the previous month.
Dwelling values across the combined capitals rose 0.6% in November. Monthly growth across the capital cities has broadly eased since recording a recent high of 1.5% in May.
The growth trajectory for housing values across the combined capitals has slowed markedly through November. This was likely a reflection of higher interest rate settings, a rise in total listings volumes, and stretched affordability.
Perth led capital growth performance in the greater capital city markets. In the year to November, Perth home values increased 13.5%. In the three months to November, Perth home values rose 5.4%.
Adelaide, Brisbane and Perth home values are currently at a record high.
In the 12 months to November, CoreLogic estimates there were 479,477 sales nationally. This is -7.6% lower than the sales volume to November 2022.
Monthly sales volumes have generally trended higher through to the end of the year, and are above the historic five-year average monthly sales volume of 40,972.
It is taking slightly longer to sell properties, the rate of vendor discounting now looks to be steadying at -3.3%, new listings have begun a seasonal slowdown, and total listings are gradually lifting, but remain -17.7% below the historic five-year average.
The final clearance rate across the combined capital cities market is currently trending lower.
Want to know what’s happening to the housing markets around Australia?
Well, this monthly collection of charts from CoreLogic paints an interesting picture.
Our property markets turned the corner earlier this year and despite 13 interest rate increases property prices have kept rising for 10 months in a row.
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.
Residential real estate underpins Australia’s wealth
- The total value of Australian residential real estate was $10.3 trillion at the end of November 2023. This has been increasing month after month and has now reached a new peak.
- However, outstanding mortgages against all residential housing are only $2.2 trillion – a very comfortable 22% Loan to Value ratio.
- 56.6% 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 November
- Dwelling values across the combined capitals rose 0.6% in November. Monthly growth across the capital cities have broadly eased since recording a recent high of 1.5% in May.
- Combined capital city values rose 2.2% over the last 3 months while regional property values only rose 1.8% over the last quarter.
- 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.
- As we come to the end of the 2023 selling season there’s an element of FOMO creeping into the market.
- However, our property markets are fragmented and while most segments growing, some are still languishing.
- National home values rose 2.1% in the three months to November, easing slightly from a recent high of 3.2% in the June quarter.
- Home values increased 7.0% in the year to November, which is the highest annual rate of increase since July 2022.
- As you can see from the table below, the pace of growth in capital city is outpacing regional Australia.
Our capital city markets are fragmented
But, as mentioned previously, within each state our housing markets are fragmented, and the more expensive sectors of the market which led to the downturn initially led the upturn early this year.
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 13.5% over the year and are now at a record high.
- On the other hand, Melbourne property values, decreased -0.1% in the month of November and are still -3.8% below the record high, which was in March 2022.
- And in the previous darling of the housing markets – Hobart – house prices are -11.1% below their record highs recorded in March 2022.
Brisbane property values increased 10.7% over the last year to record highs.
And Sydney property values are now -1.9% below their record high reached in January 2022.
Sales volumes are trending closer to a historic monthly five-year average
- In the 12 months to November, CoreLogic estimates there were 479,477 sales nationally.
- This is -7.6% lower than the sales volume to November 2022.
- Monthly sales volumes have generally trended higher through to the end of the year, and are above the historic five-year average monthly sales volume of 40,972.
We’ve moved into a more balanced market
- It is taking slightly longer to sell properties across Australia than in previous months. The median selling time has reduced across the combined capitals market year-on-year, but the trend looks to be turning as market conditions soften slightly.
- Selling times across the combined regional market are higher than a year ago, but remain well below pre COVID levels.
Vendor Discounting
- Vendor discounting vastly improved for sellers throughout 2023, in line with the reduction in selling times. However, across the capital cities the rate of vendor discounting now looks to be steadying
- The median vendor discount nationally was -3.6% in the three months to November, up from a recent low of -4.3% at the end of last year.
Here’s how many properties are for sale at the moment
- In the four weeks to December 3, new listings totaled 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
-
As with the capital growth trend, the final clearance rate across the combined capital cities market is currently trending lower.
- In the four weeks to December 3, the combined capital city clearance rate averaged 61.7%, down from 64.4% in the previous four-week period.
-
We update the weekly auction clearance results here each week.
We’re experiencing a rental market crisis in Australia
- Australian rent values increased a further 0.7% in November, taking the national annual increase to 8.1% for the third month in a row.
- Annual growth in rent values remains elevated across all dwellings, and there has been some reacceleration in the annual growth of house rents, to 7.2% in the year to November.
- While growth in rent values remains elevated, gross rent yields have stabilised in recent months.
- Gross rent yields nationally recorded a slight decline from 3.70% in September to 3.69% in November.
Dwelling approvals and housing credit
- Dwelling approvals have begun to trend higher since a recent low in January 2023, but remain relatively low overall.
- For the past six months, monthly dwelling approvals have averaged 13,838, below the decade average of 17,277.
- Through October, average new variable rates were 6.0% for owner-occupiers and 6.28% for investors.
- Average new fixed rates with a term of more than 3 years are notably higher than average variable rates for both borrower types.
Finance and Lending
- The value of new housing finance secured through October rose a substantial 5.4%, to $26.7 billion.
- This was the highest level since August 2022.
- Growth in owner-occupier finance was faster than investment housing finance through the month, causing the share of investment finance to trend slightly lower.
- Housing finance is a “leading indicator” of what’s ahead for our property markets – and increased loan approvals mean more property purchases moving forward.
Source of charts: CoreLogic Chart Pack, December 2023.
