Quarterly price growth showing ‘clear signs’ of slowing

Australian home values increased by 0.5 per cent during August, the latest Home Value Index (HVI) report by CoreLogic has revealed.

This is now the 19th consecutive month of value increases, slightly above the 0.3 per cent (downwardly revised) seen through July; however, CoreLogic has reported that the pace of growth is showing “clear signs of slowing”.

The quarterly increase in national home values of 1.3 per cent is now less than half the rate of growth in the same three-month period last year (2.7 per cent).

Much like the month prior, growth across the capitals remained diverse during August, with gains being led by Perth (2 per cent), followed by Adelaide (1.4 per cent) and Brisbane (1.1 per cent).

Meanwhile, Sydney saw marginal growth with just 0.3 per cent for the month.

The other capitals recorded monthly declines in home values, which were led by a 0.4 per cent drop in Canberra, followed by Melbourne and Darwin (down 0.2 per cent), and a small drop in Hobart (0.1 per cent).

Quarterly, growth eased in most capitals, with a more apparent slowdown observed in Brisbane where the growth rate dropped to 2.9 per cent from the 4.1 per cent recorded in May.

According to CoreLogic, this has suggested an “easing in demand across this increasingly less affordable market”.

Eliza Owen, CoreLogic’s head of research, said that although seasonality may have been behind weaker value growth through the colder months, affordability constraints are “a key factor behind the broader slowdown”.

“The seasonally adjusted Home Value Index had a stronger result through the three months to August, at 1.7 per cent. But this is still down from the 3.3 per cent lift seen in the winter of 2023,” she said.

Owen further said that the high levels of growth in Perth, Adelaide, and Brisbane “would be difficult to sustain”.

“Housing values cannot keep rising at the same pace in the mid-sized capitals of Perth, Adelaide and Brisbane when affordability is becoming increasingly stretched, particularly in the context of elevated interest rates, loosening labour market conditions and cost of living pressures,” Owen said.

PropTrack’s Home Price Index revealed a lift in national home prices of 0.22 per cent and has also observed a slowing pace of growth, according to senior economist Eleanor Creagh.

“National home prices have cycled through 20 consecutive months of growth, although the pace of growth has slowed in the seasonally quieter period,” she said.

“Although the number of homes hitting the market this year has lifted, strong population growth, tight rental markets and home equity gains are bolstering demand. Meanwhile, building activity remains challenged, exacerbating a chronic shortage of housing.

“Supporting price growth, July’s tax cuts boosted borrowing capacities and buyers’ budgets, while the persistent growth in home prices is likely motivating many to overcome affordability challenges.”

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Adrian Suljanovic is a journalist at Broker Daily with more than two years experience reporting on all facets of the third party distribution channel.

Adrian has written for a range of business and finance titles including IFA, Investor Daily and Lawyer’s Weekly before joining the mortgages team in 2022.

He graduated from the University of Wollongong in 2021 gaining a Bachelor of Communication & Media with a major in Digital & Social Media.

E-mail Adrian at: This email address is being protected from spambots. You need JavaScript enabled to view it.