Tim Lawless flags early indicators of housing confidence

CoreLogic has revealed a 0.6 per cent rise in its national Home Value Index (HVI) across the month of February, pointing to positive growth trends across the country.

That’s a 20-bp acceleration from the 0.4 per cent increase that occurred across January – and made for the strongest monthly gain in values since October 2023.

The gains were widespread, with CoreLogic flagging that every single capital city and rest-of-state region recorded a lift in value across the month, barring Hobart.

Perth was at the front of the pack for growth, seeing values lift 1.8 per cent across the month. Over the same period, Adelaide saw a 1.1 per cent growth in values, while Brisbane recorded growth of 0.9 per cent.

Across the regions of South Australia (1.1 per cent), Western Australia (1 per cent), and Queensland (1 per cent), growth was also strong.

Across and down in Sydney and Melbourne, CoreLogic noted values have “levelled out” – but seen an acceleration in monthly trends. Melbourne saw a 0.1 per cent rise in values across February, while Sydney dwelling values “have moved back into positive territory.”

In the only city to see a downturn, Hobart, values fell by -0.3 per cent.

Weighing in on the findings, CoreLogic research director Tim Lawless stated that Australia’s housing values have been “more than resilient” despite high interest rates and cost-of-living pressures.

From his perspective, “the ongoing rise in housing values reflects a persistent imbalance between supply and demand which varies in magnitude across our cities and regions.”

Reflecting on the growth seen in Western Australia, South Australia, and Queensland, Lawless said “these regions are generally benefiting from a combination of comparatively lower housing prices and positive demographic factors that continue to support housing demand.”

And the uptick in Sydney and Melbourne should also be viewed positively, Lawless remarked.

“Potentially we are seeing some early signs of a boost to housing confidence as inflation eases and expectations for a rate cut, or cuts, later this year firm up,” Lawless said.

Alongside the improvements to value growth, CoreLogic noted a bounceback in auction clearance rates as a further indication of positivity in the marketplace, with clearance rates up in the high 60 per cent range.

Lawless pointed out: “Auction results and sentiment have both shown a historically strong relationship with housing trends.

“The rise in clearance rates from the mid-50 per cent range late last year to the high 60 per cent range in February points to a better fit between buyer and seller pricing expectations. A rise in sentiment suggests households will have a better ability to make decisions around large financial commitments, like a property purchase.”

Despite the gains – and the lift in confidence – Lawless does not expect significant growth over the course of the year.

“It’s hard to see a significant rebound in values shaping up given downside factors. Affordability constraints, rising unemployment, a slowdown in the rate of household savings and a cautious lending environment, are all factors likely to keep a lid on value growth over the near term,” he stated.

That is despite shortfalls in housing supply relative to housing demand “continuing to place upwards pressure on home values across most regions.”