Source: CoreLogic
The Australian property market has hit a landmark value of $11 trillion, a testament to its resilience and continued appeal. CoreLogic’s October Monthly Housing Chart Pack highlights a remarkable $900 billion increase over the past year, a substantial leap for residential real estate. However, the pace of growth has softened, with national home values up just 1% in the September quarter, marking the slowest rise since March 2023.
Among major cities, Perth emerged as the standout, with property values soaring by 24.1% annually to a new record high. Limited supply and sustained demand make Perth a hotspot for growth. Brisbane and Adelaide also reported impressive gains, with values climbing 14.5% and 14.8%, respectively. Sydney saw a more modest increase of 4.5% but also hit a record high.
On the other hand, Melbourne and Hobart have taken a hit. Their property values remain well below peak levels from early 2022, with Melbourne’s values down by 5.1% and Hobart’s by a significant 12.5%.
Despite slowing growth, investor interest is high, accounting for nearly 39% of new loan commitments, the highest since 2017. Factors like potential for capital gains and a tight rental market likely fuel this activity, even as rental yields compress. National rental growth has slowed to just 0.1% this quarter—the lowest in four years—placing pressure on affordability. Gross rental yields have dipped from 4.1% last year to 3.68%, reflecting rising costs for tenants.
As new listings continue to rise through spring, growth rates may moderate further, offering relief for buyers. This increased stock could especially benefit first-home buyers, although intensified investor interest could add competition, particularly in popular capital cities.
Overall, while Australia’s property market remains solid, the current shift suggests a period of more moderate growth and increased balance between supply and demand. For buyers and investors, this environment provides both challenges and opportunities—balanced choices, less intense competition, and favorable prospects for those considering long-term investments.
As we enter this phase, the Australian property market’s $11 trillion milestone is a reminder of its lasting strength, even amid changes in pace and market conditions.
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