According to CoreLogic’s national Home Value Index (HVI), home values in Australia have experienced a significant rebound.
The HVI recorded a third consecutive monthly rise, with the pace of growth accelerating sharply to 1.2% in May. This marks a substantial increase compared to the previous months, where home values increased by 0.6% in March and 0.5% in April.
The positive trend in home values extends to regional areas, although at a slower pace compared to the capital cities.
Mr. Lawless said that over the past three months, growth in the combined capitals index was more than triple the pace of growth seen across the combined regional areas at 2.8% and 0.8% respectively. While the advertised housing supply remains tight in regional Australia, demand from net overseas migration is less substantial. Additionally, a slowdown in internal migration rates across the regions has helped alleviate some of the demand pressures on housing.
The premium housing markets in Sydney are leading the recovery trend. While Sydney experienced a significant drop in property values, the upper quartile, which represents the most expensive quarter, stands out with the highest rate of growth. Over the past three months, the upper quartile in Sydney has seen a gain of 5.6%, compared to a 2.6% rise in the more affordable lower quartile.
It’s worth noting that despite the recent gains, most housing markets in Australia are still recording values that are well below their recent peaks.
- Only Perth has seen dwelling values return to record highs.
- Sydney home values are still -9.6% below the January 2022 peak.
- Hobart has the lowest values relative to its recent cyclical peak in May 2022, down by -12.6%.
- Melbourne is down -8.2% from its peak in February last year.
- Brisbane values are -9.4% below the June 2022 peak.
Despite the faster growth in values for expensive homes, as of May, the dwelling values in Sydney’s upper quartile remained -11.8% below the peak recorded in January 2022. This translates to a saving of approximately $213,000 from the cyclical high.
