CoreLogic’s DECEMBER Home Value Index reveals that housing values rose another 1.3% in November, taking prices 22.2% higher over the past 12 months. The report also shows that the gap between capital city houses and apartments is now the largest on record!
The November uptick in values has added $126,700 to the median value of an Australian home but the rate of growth is definitely slowing. Virtually every factor that has driven housing values higher has lost some potency in recent months. Fixed mortgage rates are rising, a higher number of listings for sale is taking some of the urgency out of the market for buyers, affordability has become a more substantial barrier to entry and credit is less available.
Monthly change in capital city home values
Brisbane & Adelaide are showing the fastest growth
The capital city trends are showing greater diversity, with Brisbane and Adelaide now recording the fastest pace of growth, while conditions across Sydney and Melbourne have slowed more sharply.
Brisbane and Adelaide are the only capital cities yet to experience a slowdown, with the monthly rate of growth reaching a new cyclical high across both cities in November. Brisbane home Index results as at November 30, 2021 values were up 2.9% in November (highest since Oct 2003) while Adelaide values were up 2.5% (highest since Feb 1993). In dollar terms that equates to a monthly rise of approximately $18,500 and $13,500 respectively based on median values.
Nationally, there are 141,786 houses and apartments currently for sale. It’s still a seller’s market but there is a good chance advertised supply will continue to rise through the rest of summer, creating more choice for buyers.
Housing inventory levels starting to normalise
Different supply dynamics are creating divergent trends across Australian capital cities. In the four-week period to November 28, total stock available for sale across Adelaide was -32.0% lower than the five-year average, and -33.9% lower across Brisbane. Across Sydney and Melbourne however, stock levels have become far more normalised in recent weeks, with Sydney total listings sitting just -2.6% below the five-year average, while stock levels across Melbourne are 7.9% above the five-year average.
Houses still outperforming units
Houses have continued to outperform units, with capital city values up 1.2% and 0.7% respectively over the month. However, the quarterly rate of growth is now the narrowest it has been since October last year, with 1.6 percentage points between the two broad housing types.
Based on median values, capital city houses are now 37.9% more expensive than capital city units – the largest difference on record. In dollar value terms, a capital city house is averaging approximately $240,500 more than a capital city unit. In Sydney, where the gap between house and unit values is the widest, a house costs $523,000 more on average than a unit.