Welcome to our May 24 Property Market Snapshot.
May at a glance
- Home Values saw a 0.8% increase, the 16th consecutive month of growth and the largest monthly gain since October last year
- Perth, Adelaide, and Brisbane continue to lead this increase.
Dwelling values
Source: CoreLogic Hedonic Home Value Index, 3 June 2024.
Rental market
In recent months, there has been a notable deceleration in the growth rate of Australia’s rental markets. The national rental index only increasing by 0.7% in May, the smallest monthly change since December last year. This slowdown is noticeable across most cities, particularly in the unit sector. This indicates a broader easing in rental demand compared to the typically high demand experienced in the first quarter of the year. Despite this moderation, rents rose by 8.5% nationally over the past 12 months. Though this is a slower pace than seen in previous years.
Several factors contribute to this trend, including a gradual decrease in net migration since early 2023 and ongoing affordability challenges in the rental market. Furthermore, the completion of dwellings linked to the HomeBuilder scheme is anticipated to prompt homeowners to transition from rental properties to their newly constructed homes. Despite the slowdown in rental growth, gross rental yields have increased to 3.56% across combined capitals, the highest level since August 2019. This uptick in yields is advantageous for investors, particularly given the persistently high variable interest rates for investor loans.
Source: CoreLogic Hedonic Home Value Index, 3 June 2024.
Outlook
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Source: CoreLogic Hedonic Home Value Index, 3 June 2024.
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