Australia’s housing upswing continued through the first month of 2024 with CoreLogic’s National Home Value Index rising by 0.4% in January.
Melbourne dwelling values have been drifting lower since November, falling nearly 1% over the past three months.
House values continued to rise at a faster rate than unit values in January, with the gap between the median capital city house and unit value rising to a record high of 45.2%.
Such a wide gap is the result of house values recording more than three times the capital gain of units since the onset of the pandemic.
Since March 2020, capital city house values have surged by 34%, compared with an 11% rise across the unit sector.
This trend continued in January, with house values up 0.5% over the month, adding around $4,800 to the median house value, while units increased by a small 0.1%, equivalent to a $900 lift.
It seems that most Australians are willing to pay a higher premium than ever for a detached home
The unit market has warned the brunt of value falls down 1.3% over the rolling quarter compared with the 0.8% fall in house values over the same period.
It’s been the upper quartile of the market where values have fallen the most over the past three months, with the most expensive quarter of the unit market down 2% and upper quartile house values down 1.6%.
The most resilient housing cohort has been the lower quartile house values, which continue to trend slightly higher, up 0.1% over the past three months.
Regional markets are now showing a stronger trend in value growth relative to the capital cities.
The combined regional index rose by 1.2% over the rolling quarter, compared with a 1% rise across the combined capitals index.
Both the combined capitals and the combined regional markets are losing momentum in the pace of value growth, but the capital city trend is experiencing a sharper slowdown, mostly due to the flattening of growth conditions in Melbourne and Sydney.
CoreLogic estimates there were over 115,000 dwellings sold over the three months ending January, 11.9% higher than at the same period last year, and 0.5% above the previous five-year average for this time of the year.
Although households are dealing with the ongoing cost of living pressures, high interest rates, low consumer sentiment, and affordability constraints, homes are still selling.
Housing demand has been buoyed by high migration, but also by tight rental markets that have probably incentivised renters to transition towards home ownership if they can afford to do so.
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