Unlocking Smarter Property Decisions – Navigating the Changing Tides of Real Estate with CoreLogic’s Most Recent Home Value Index

In the realm of housing values, a compelling trend continues to unfold. In July, CoreLogic’s national Home Value Index (HVI) displayed a notable 0.7% increase, marking the fifth consecutive month of housing value recovery. 

This uptick represents a subtle acceleration from the 0.7% rise observed in the previous month, effectively breaking a two-month trend of slowing capital gains.

To put things into perspective, since reaching its lowest point in February, the national HVI has surged by a commendable 4.9%. 

In practical terms, this translates to an approximate addition of $34,301 to the median dwelling value, underscoring the resilience and vigor of the housing market’s bounce back.

This resurgence, notably, is not localized but rather widespread. Nearly every capital city, with the exception of Hobart (-0.1%), witnessed a surge in dwelling values over the course of the month. 

Leading the charge was Brisbane, with an impressive 1.5% increase, closely followed by Sydney and Adelaide, where home values saw a substantial 1.1% uptick. 

This collective, broad-based momentum is painting an intriguing picture of the real estate landscape. Read along to uncover more findings from Corelogic’s Latex Home Index Reports.

A positive, but Diverse Trend

According to CoreLogic Research Director Tim Lawless, Sydney and Brisbane have led the way in the housing market recovery. Sydney has seen home values increase by 8.8% since January, while Brisbane has seen an increase of 6.2% since February.

This recovery is being driven by a number of factors, including low interest rates, strong demand, and limited supply. However, the recovery is not uniform across all capital cities. Hobart and the ACT have seen more muted price growth, with values remaining largely unchanged in Hobart and increasing by just 1% in the ACT.

This suggests that a delicate balance between buyers and sellers is playing a role in maintaining the stability of property values in these regions.

Source – CoreLogic

Here are some key takeaways from the research:

• Sydney and Brisbane are leading the way in the housing market recovery.
• House values are rising more than unit values.
• Hobart and the ACT are seeing more muted price growth.
• A delicate balance between buyers and sellers is playing a role in maintaining the stability of property values in some regions.

If you are thinking about buying or selling a home, it is important to stay up-to-date on the latest market trends. You can do this by reading research reports from organizations like CoreLogic.

Housing Market Recovery: House Values Surpassing Unit Values

A notable trend has emerged within the Australian housing market, where house values are demonstrating stronger growth compared to unit values. At the aggregated level of combined capital cities, house values have surged by 6.3% since hitting their lowest point in February. In contrast, unit values have experienced a more moderate increase of 4.9%. This difference can be attributed to the more significant decline in house values during the preceding downturn. While house values dropped by 10.7%, unit values experienced a lesser decrease of 6.5%.

Source – CoreLogic

Sydney stands out as a remarkable case in this recovery cycle. During the recent downturn, house values in Sydney plummeted by 15.0%, but they have since rebounded impressively, registering an 8.8% increase.

In regional housing markets, the situation presents a more varied landscape. Values have seen a slight decline over the month in non-capital city regions of New South Wales (-0.2%) and Victoria (-0.6%). On the flip side, regional Queensland and South Australia have experienced robust growth, with values climbing by 0.8% and 0.9%, respectively.

Mr. Lawless highlights that regional markets, by and large, aren’t witnessing the same level of recovery as their capital city counterparts. Several factors contribute to this difference, including:

• Normalization of internal migration trends across regional Australia.
• Reduced demand-side pressures resulting from net overseas migration, especially when compared to capital cities.

Historical migration data from the Australian Bureau of Statistics (ABS) indicates that, before the pandemic, regional Australia accounted for approximately 15% of total net overseas migration.

Image Source – CoreLogic

In terms of broader regional trends, housing values across Australia’s combined regional areas have experienced a 1.6% increase since reaching their lowest point in February. In comparison, the combined capital cities have witnessed a more substantial 6.0% rise in values over the same period.

Zooming in on specific SA3 markets across Australia, areas of the Gold Coast and Sunshine Coast have secured prominent positions among the top performers for capital gains over the three months ending in August. Coolangatta, in particular, has witnessed a remarkable surge in home values, posting a 6.2% increase over this period. It’s closely followed by the Sunshine Coast Hinterland (5.8%) and Gold Coast North (5.6%). The strong internal migration into these areas is believed to be a key factor bolstering housing demand and, consequently, housing values.

Key takeaways:

• House values are outperforming unit values in the Australian housing market.
• Sydney exhibits the most significant divergence in the recovery cycle to date.
• Regional markets generally aren’t experiencing the same level of recovery as capital cities.
• The Gold Coast and Sunshine Coast are the top-performing SA3 markets for capital gains.

What Does The Future Hold for Homeowners in Australia?

The Australian housing market is experiencing a broad-based recovery, with house values up 4.9% since February 2023. However, the rate of growth has definitely gone down in the past few months. Not only this but some capital cities, such as Sydney and Melbourne, are still below their peak values.

For homeowners looking to  buy property in Australia this year, there are a few key things to keep in mind:

Look out for a competitive market.

Despite the slowdown in growth, there is still strong demand for housing in Australia, particularly in capital cities. This means that as a buyer you may need to be prepared to act quickly and offer a competitive price in order to secure a desired property of your choice.

Always research to your heart’s fill.

 It is important to thoroughly research the market before making a purchase. This includes understanding the median house prices in different areas, as well as the factors that are driving demand. It is also important to factor in the cost of financing, stamp duty, and other associated overhead costs.

Get pre-approved for a mortgage.

This will give you an idea of how much you can borrow and make the buying process smoother. Handy tips to use include –

• Be prepared to negotiate. 
• Don’t be afraid to negotiate on the price of a property, especially if it has been on the market for a while.
• Seek professional advice. A qualified real estate agent or buyer’s advocate can help you find the right property for your needs and negotiate the best possible price.

If you are looking to buy some property in the current Australian market, add these additional points to your to-do checklist –

• Be flexible with your location. If you’re willing to consider buying in a less popular area, you may be able to find a better bargain.
• Consider buying a fixer-upper as this can be a great way to get a foot in the door of the property market, and you can add value to the property over time by renovating.
• Take your time. Don’t rush into a purchase. Be patient till you find the right property for you and your family.

Remember that buying a property is a major life decision, but it can also be a very rewarding experience. 

Ready to Navigate For Smarter Property Decisions?

While labor markets are expected to become more flexible, unemployment is projected to remain well below the decade’s average of 5.4%. 

The housing market is poised to continue benefiting from robust population growth in the years ahead, with no substantial supply response in sight.

Anticipated levels of net overseas migration are set to remain above average, further bolstering housing demand, especially given the backdrop of consistently low dwelling approvals. 

Current estimates from NHIFIC indicate that Australia’s housing sector is on track to face a shortage of approximately 175,000 dwellings by 2027. This supply-demand gap is poised to provide continued support to housing prices in the long run.

This can significantly impact your decisions for buying property in the coming time. 

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