Home value upswing ‘all but over’

CoreLogic’s latest Home Value Index (HVI) rose by a meagre 0.1 per cent over November, marking the weakest national result since January 2023. While this was the 22nd consecutive month of growth, CoreLogic has said that this could be “close to the last in this cycle”.

Out of the capitals, Melbourne recorded the largest price decrease at 0.4 per cent month-on-month and a fall of 2.3 per cent annually. This monthly decline was the 10th month out of the last 12 to record a price fall.

According to CoreLogic, September likely marked the peak of Sydney’s cycle, with values now dropping over two consecutive months (0.1 per cent in October and 0.2 per cent in November).

On a quarterly basis, four capitals have seen price declines, led by Melbourne at 1 per cent, followed by Darwin (0.7 per cent), Sydney (0.5 per cent), and Canberra (0.3 per cent).

Tim Lawless, CoreLogic’s research director, said the downturn is “gathering momentum in Melbourne and Sydney”.

“[Meanwhile] the mid-sized capitals, which have dominated the growth cycle as of late, are also losing steam,” Lawless said.

“The mid-sized capitals and most of the regional ‘rest of state’ markets continue to provide some support for growth in the national index, but it is clear momentum is also leaving these markets.”

Perth continued to lead the country in the pace of capital gain, rising by 1.1 per cent over November, and 3 per cent higher over the rolling quarter; however, this was the softest increase over a rolling three-month period since April 2023 and less than half the rate of growth recorded over the June quarter’s figure of 6.7 per cent.

Brisbane’s quarterly rate also eased down to 1.8 per cent to the slowest pace of gains since March 2023, while Adelaide recorded its smallest outcome since June 2023 with a 2.8 per cent rise over the past three months.

Commenting on the data, Commonwealth Bank of Australia’s (CBA) senior economist Belinda Allen said the outlook for home prices along with building approvals over 2025 is “uncertain and conditional on the path of the cash rate”.

“We are expecting 100bp of easing by the RBA in 2025. Our base case remains for the first cut in the cash rate in February 2025, but the clear risk sits with a later start date,” Allen said.

“At this stage we are expecting home prices to lift by 5 per cent in 2025, but the risk sits with a softer outcome given recent momentum and the growing shift from a sellers to buyers market.”

Matthew Hassan, Westpac’s head of Australian macro-forecasting, said the November update has shown a “clear tapering off in price growth and a softening in turnover”.

“With the prospect of interest rate cuts still looking some way off, markets are likely to slow further over the first half of next year with a further narrowing in the divergence of performances – prices staying subdued where they are already soft and cooling further where they have been rising strongly,” Hassan said.

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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.