Home values rise again in March 2024 as market recovery accelerates

Article by Adam Vidler Source 9 News

CoreLogic said its national Home Value Index rose 0.6 per cent in March, for a quarterly total of 1.6 per cent.

Since declining 7.5 per cent between April 2022 and January 2023, the national Home Value Index (HVI) has increased 10.2 per cent, or, in dollar terms, by about $71,832, rising to new record highs each month since November last year.

The dollar value of the March quarterly increase totted up to about $12,000.

Every capital city except Darwin (where values dropped 0.2 per cent) recorded a rise in dwelling values during March, although CoreLogic research director, Tim Lawless, said the monthly gains continued to be punctuated by diversity.

“At one end of the scale we have Perth’s housing market where values were up 1.9 per cent over the month, followed by Adelaide and Brisbane with 1.4 per cent and 1.1 per cent growth,” he said.

“The remaining capitals are showing much lower rates of change, although Melbourne is the only capital city to record a negative quarterly movement, down 0.2 per cent over the first three months of the year.”

However, according to CoreLogic’s data, prices are continuing to not just rise, but once again accelerate slightly.

The 1.6 per cent of growth in the first quarter of this year compares to 1.4 per cent in the final quarter of last year.

However, it is still just half of the 3.3 per cent increases quarter-on-quarter seen in the middle of last year.

“Rate hikes, cost of living pressures and worsening housing affordability are all factors that have contributed to softer housing conditions since mid-last year,” Lawless said.

“However, an undersupply of housing relative to demand continues to keep upwards pressure on home values despite these headwinds.

“The diversity in housing value outcomes can be explained by significant differences in factors like housing affordability, demand-side pressures from population growth and shortcomings in housing supply.”

For example, he said, in Perth, despite such “a rapid pace of capital gains”, prices remained relatively affordable compared with the larger capital cities.

“Housing remains in short supply and purchasing demand is still high due to interstate and overseas migration rates that are well above average,” Lawless said.

Australian Bureau of Statistics data showed that net overseas migration to Western Australia was at 18,122 people in the September quarter of last year – compared to a decade-quarterly average of 4639.

Similar surges had been seen in most states.

Additionally, housing affordability issues have seen lower-priced homes lead the growth, with values for higher-priced homes increasing by less.

In the first three months of 2024, CoreLogic data showed lower quartile home values across all capital cities lifted by 3.1 per cent, compared to 0.7 per cent for upper quartile homes.

“With housing affordability becoming more challenging and borrowing capacity lower than a year ago, it’s no surprise to see demand being skewed towards the middle-to-lower end of the value spectrum,” Lawless said.

Nonetheless, home sales are up in numbers as well, by an estimated 3.7 per cent in the first quarter compared to the decade average for this time of year.

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