- House values increased by 1.8% during April
- The rate of increase fell 1% fall compared to March
- CoreLogic suggests housing price pace will slow as inventory levels rise
CoreLogic data released today has shown that house values lifted by 1.8% during April – easing from the 32-year high increase of 2.8% during March.
Although the growth has lost some steam, house values are still rising. Values are up 6.8% over the past three months and are 10.2% higher than the pandemic-driven low of September 2020.
Talk of booms ending, or running out of steam, could be premature, although Tim Lawless, CoreLogic’s research director, said as inventory levels rise and affordability constraints occur, the pace of capital gains will likely slow.
“The slowdown in housing value appreciation is unsurprising given the rapid rate of growth seen over the past six months, especially in the context of subdued wages growth.
“With housing prices rising faster than incomes, it’s likely price sensitive sectors of the market, such as first home buyers and lower income households, are finding it harder to save for a deposit and transactional costs.”
Tim Lawless, CoreLogic
The data released made mention of recent Australian Bureau of Statistics (ABS) data showing that there was a 4% fall in the value of first home buyer home loans during February – the first monthly decrease since May 2020. This suggests there are fewer first time buyers present in the market.
Despite the easing in pace, all capital cities and ‘rest-of-state’ regions saw an increase in dwelling values over April.
Darwin and Sydney recorded 2.7% and 2.4% growth respectively, with Perth recording just 0.8% in growth – the lowest of the capital cities.
Houses continue to outperform units with the combined capital city house values rising by 8.6% this year so far compared to 4.4% for units. This reflects an ongoing broader trend with less demand for high-density housing and some elevated supply across some inner-city localities.
“A preference shift away from higher density housing during a global pandemic is understandable, however a rise in flexible working arrangements also seems to be supporting greater demand for houses around the outer-fringes of capital cities.”
“Relatively weak investor activity, compounded by a supply overhang in some high-rise precincts, is also dampening price growth in unit markets.”
