April at a glance
- National dwelling values rose by 0.5% over the previous month,
- The four largest capital cities all saw a increase in values,
- Sydney saw the largest increase (1.3%),
- Darwin was the only capital to record a decline (-1.2%).
Dwelling values
April saw a second consecutive monthly increase, with housing values rising 0.5% in April following a 0.6% uplift in March. The four largest capital cities in Australia all recorded an increase in housing values over the rolling quarter.
Sydney has been leading the upswing in housing conditions, with dwelling values increasing for the past three months and now sitting 3.0% higher since the trough in January.
Source: CoreLogic Hedonic Home Value Index, 1 May 2023.
Most regions across Australia are experiencing stabilising or rising housing values, with only Regional NSW and Regional Victoria recording a fall in values over the month. However, most regions remain well below their recent cyclical highs, with Hobart experiencing the largest drop of -13.0%. Sydney and Brisbane also recorded significant declines, with values -11.2% and -10.7% below their recent peaks, respectively. Nevertheless, several regions reached a new cyclical high in April 2023, including Perth, Regional SA, and Regional WA.
Source: CoreLogic Hedonic Home Value Index, 1 May 2023.
Rental market
In April, both combined capital cities and regional rents rose by 1.1% and 0.5%. Unit rents are rising faster than house rents across the combined capital cities. This trend has been consistent since early 2022 and has been driven by factors such as rental affordability, increased rental demand from overseas migration and a lack of new unit supply. The trend rate of growth in rents is accelerating in Sydney, Melbourne, and Perth, and is set to persist with vacancy rates at record lows in most regions.
Source: CoreLogic Hedonic Home Value Index, 1 May 2023.
Outlook
The direction of interest rates will significantly impact the housing market’s future. In May, the Reserve Bank raised the official cash rate by 0.25%, putting it at its highest level since May 2012. It is unclear when the next rate cut will occur, but a reduction in interest rates could lead to increased momentum in the housing market.
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Author: Tania Minchella
Disclaimer: The opinions posted within this blog are those of the writer and do not necessarily reflect the views of Better Homes and Gardens® Real Estate, others employed by Better Homes and Gardens® Real Estate or the organisations with which the network is affiliated. The author takes full responsibility for his opinions and does not hold Better Homes and Gardens® Real Estate or any third party responsible for anything in the posted content. The author freely admits that his views may not be the same as those of his colleagues, or third parties associated with the Better Homes and Gardens® Real Estate network.