The Ups and Downs of Australia’s Housing Market: A Closer Look at the Trends for Q1 2024
As we delve into the intricacies of Australia's housing market, it's clear that the landscape is ever-changing. Recent data from CoreLogic's Home Value Index (HVI) sheds light on the market's current trajectory, offering insights into what's driving the trends and what lies ahead for prospective buyers, sellers, and investors.
One notable aspect is the consistent growth seen in the national HVI, which has been on an upward trajectory for the past 14 months. Despite a significant downturn between April 2022 and January 2023, where the index dipped by -7.5%, we've witnessed a remarkable rebound, with values surging by approximately 10.2% since then. This upward momentum has pushed home values to new record highs month after month since November of last year.
However, this growth isn't uniform across the board. While most capital cities, with the exception of Darwin, have seen an increase in dwelling values, the rates of growth vary. Cities like Perth, Adelaide, and Brisbane have experienced more substantial gains, while Melbourne has seen a slight decline in the first quarter of this year (-0.2%).
Several factors contribute to the housing market's resilience amidst challenges such as rate hikes, cost of living pressures, and worsening affordability. Notably, an undersupply of housing relative to demand continues to put upward pressure on home values. Factors like population growth, interstate migration, and overseas migration rates above average have also played a significant role, particularly in regions like Perth.
Interestingly, there's been a shift in demand towards more affordable housing options, with lower quartile home values outpacing their upper quartile counterparts across most capital city markets. This trend underscores the growing importance of affordability in driving purchasing decisions.
Regional housing markets are also experiencing their own set of dynamics, with some regions, like Regional Victoria, facing softer growth conditions compared to others.
Despite these fluctuations, the volume of home sales has seen an uptick in the first quarter of this year compared to the same period last year, signalling ongoing activity in the market.
Australia's housing market is a complex ecosystem influenced by a multitude of factors. While growth continues to be a prominent theme, it's essential to recognise the nuances and variations across different regions and market segments. Navigating these dynamics requires a keen understanding of the underlying trends and a strategic approach to seizing opportunities in this ever-evolving landscape.
Corelogic HVI: https://www.corelogic.com.au/__data/assets/pdf_file/0015/22245/CoreLogic-HVI-APR-2024-FINAL.pdf
