Property Market Update: Australian Housing Values Continue to Grow

By Charles Tarbey, Chairman Better Homes and Gardens Real Estate Australasia

Australian housing values rose by 0.6% in June, marking a fifth straight month of growth.

Monthly gains were recorded across almost every broad region of Australia, with Hobart (-0.2%), the only capital city or rest-of-state region to see a month-on-month fall.

On a yearly basis, Adelaide leads the nation achieving growth of 8% with Brisbane (7%) and Darwin (6%) close behind. Melbourne is the only capital city that did not record growth over the previous 12 months, but its rate of growth has closely mirrored other capital cities over June.

Cotality’s research director, Tim Lawless, says falling interest rates have been a clear catalyst behind the renewed momentum.

“The first rate cut in February was a clear turning point for housing value trends. An additional cut in May, and growing certainty of more cuts later in the year have further fuelled positive housing sentiment, pushing values higher.

“Although value rises have been broad-based, the pace of growth remains mild compared to mid-2023 when the quarterly rate of growth in national home values peaked at 3.3%, and for that matter, positively tepid relative to the extreme 8.1% quarterly peak growth recorded through the height of the pandemic,” said Mr Lawless.

From a supply perspective, advertised stock levels are also low, tracking -5.8% below the same time a year ago (based on data for the four weeks ending June 29^th) and -16.7% below the previous five-year average.

Falling interest rates and the perceived safety of property investments – amongst global uncertainty on many fronts – may have many property investors looking to expand their portfolios at present.

The Chairman and Owner of CENTURY 21 Australasia, Charles Tarbey, said that investors may be able to secure strong property purchases at present if they take a long term view, “There used to be a lot of advice to sellers not to sell in winter for a whole host of reasons but I take the view that, due largely to restricted stock levels, there are no longer clearly defined real estate seasons.

“A further lowering of interest rates coupled with the new first home buyer scheme may see more and more buyers entering the market as we get closer to the end of the year. You could make the case that savvy investors should be active in the market at the moment so long as they are strategic with their investments and take a long-term view,” said Mr Tarbey.

Mr Tarbey said that Melbourne remains a market that he would be closely assessing as an investor, “Melbourne was the only capital city to record negative price growth over the last twelve months, and its average dwelling price now sits behind Sydney, Brisbane, Adelaide and Perth which is interesting considering its Australia’s second largest economy and accounts for nearly a quarter of the nation’s GDP.

“Victoria’s large economy, rich culture, wine regions and world class sporting facilities will likely make it an attractive destination for people for years to come – especially considering its one of the cheapest states in Australia to purchase a home at present. 

“Perhaps because of some of these reasons, we are starting to see the rate of growth in Melbourne catching up to other locations. This market would be very high on my list of regions to closely assess but with a strong focus on properties, within suburbs, that have the potential to achieve strong capital growth,” said Mr Tarbey.

Read Cotality’s National Home Value Index here.

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