February sees continued rise in Australian capital city home values
Australian home values increased by 0.6 percent nationwide in February, with significant jumps seen in Perth, Adelaide, and Brisbane.
In Perth, values rose by 1.8 percent in just a month, while Adelaide saw a 1.1 percent increase, and Brisbane a 0.9 percent leap, as per Core Logic research.
Canberra dwelling values went up by 0.7 percent, Sydney values climbed by 0.5 percent, and Melbourne and Darwin house prices saw a 0.1 percent rise.
Hobart was the only capital city to experience a decrease, with home values dropping by 0.3 percent in a month.
According to Mr. Lawless, CoreLogic research director, there are early indicators of a housing confidence boost due to easing inflation and growing rate cut expectations. He mentioned, “Housing values have shown resilience amidst high interest rates and cost of living pressures.”
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“The ongoing rise in housing values reflects a persistent imbalance between supply and demand which varies in magnitude across our cities and regions.”
Over the last year, Perth’s home values soared by 18.3 percent, Brisbane’s house prices surged by 15.6 percent, and Adelaide’s house prices ascended by 11.8 percent. Meanwhile, Sydney home values increased by 10.6 percent, Melbourne house prices by 4 percent, and Canberra by 1.6 percent. On the other hand, Hobart prices fell by 0.6 percent, and Darwin prices slipped by 0.1 percent throughout the last year.
Across all Australian capital cities combined, dwelling values rose by 10 percent, while regional house prices jumped by 5.5 percent in a year.
Median House Values Continue to Rise
The median home value in Sydney stands at $1.128 million (US$733,000), the highest in the country. Canberra follows with a median of $840,103, Brisbane at $805,593, Melbourne (including apartments) at $778,941, and Adelaide at $727,142.
The median home value in Perth is $687,004, Hobart at $652,645, Darwin at $499,834, with a national median house price of $842,109. In regional Australia, the median home value is $612,096.
Core Logic observed that the value growth coincided with an increase in auction clearance rates, averaging 60 percent in February.
“Auction results and sentiment have historically influenced housing trends,” stated Mr. Lawless. “The rise in clearance rates from the mid-50 percent range late last year to the high 60 percent range in February indicates better alignment between buyer and seller pricing expectations. The improved sentiment suggests households are better equipped to make decisions regarding significant financial commitments, such as property purchases.”
Housing turnover has surpassed levels from the same time the previous year but remains below the five-year average, as per Core Logic.
“If sentiment continues to improve, we may witness a surge in home sales volume later this year,” added Mr. Lawless.
Rents also Rise in February
Rents increased by 0.9 percent in February, marking the second-highest jump since March last year.
In a quarter, rents rose by 2.4 percent nationwide, the largest increase since May last year, according to Core Logic.
Over the past year, the national rental index surged by 8.5 percent ending in February. Core Logic noted that house rental growth has been on an upward trend since October last year, while unit rental growth slowed from 14 percent in April last year to 9.6 percent.
“Although unit rent growth is slowing down, the cost of renting in the unit sector continues to rise at a faster rate than in the housing sector across most regions,” Mr. Lawless explained.
In Perth, housing rents rose by 13.5 percent annually, with Brisbane at 12.3 percent, Sydney at 10.2 percent, Melbourne at 10 percent, and Adelaide at 9.7 percent. Meanwhile, Darwin experienced a 3.3 percent rise, while Canberra saw a 0.7 percent decline and Hobart a 1.8 percent decrease.
Rental unit rates in Perth surged by 16.5 percent, Brisbane at 12.3 percent, Sydney at 10.2 percent, Melbourne at 10 percent, and Adelaide by 9.7 percent. Similarly, Darwin saw a 2.6 percent increase, Canberra a 0.9 percent rise, and Hobart a 3.4 percent decline.
Core Logic highlighted that Perth is witnessing a swift growth rate in rental values among capital cities, with no signs of slowing down.
“The same factors driving up home values in Perth are contributing to the rental sector’s performance, with demand significantly exceeding supply, keeping rental growth well above average levels,” stated Mr. Lawless.
Research indicates that gross rental yields are stable in most markets and have even risen nationally since late 2023.
“The subtle increase in rental yields can be attributed to rental rates rising faster than property values since November 2023. While national yields are nearing pre-COVID levels, they are considerably higher than the record lows of 2021 when yields dropped to 3.16 percent,” noted Core Logic.
