As real estate agents, staying up to date with the latest market trends is pivotal to providing informed advice and guidance to our clients. CoreLogic's recent Home Value Index (HVI) report for November offers valuable insights into the current state of Australia's housing market. Let's unpack the key highlights and what they mean for buyers, sellers, and investors alike.
Steady Growth Amidst Shifting Dynamics
CoreLogic’s national Home Value Index (HVI) rose 0.6% in November, the smallest monthly gain since the growth cycle commenced in February. Despite this slowdown, the national HVI reached a new record high, signalling resilience in the market. Notably, housing values have rebounded by 8.3% over the past 10 months, showcasing a notable 'V' shaped recovery post the dip experienced between April 2022 and January 2023.
While the national trend remains positive, variations are evident across different capital cities. Melbourne, Hobart, and Darwin recorded declines in housing values, highlighting multi-speed conditions. Sydney also witnessed a notable slowdown in growth, with a mere 0.3% increase, the smallest monthly gain during the recovery phase.
Rental Markets: A Tale of Tightness and Transition
Rental markets continue to exhibit tight conditions, with capital city vacancy rates hovering at 1.0%. Adelaide, Perth, and Melbourne boast the lowest vacancy rates, while Sydney and Brisbane remain below average levels. Rents have been on an upward trajectory nationally since August 2020, with recent months showing a notable increase in the quarterly trend.
However, there's diversity in rental conditions, with easing seen in certain markets like Hobart and Canberra. On the flip side, Perth leads the nation in rental cost growth, with both house and unit rents experiencing significant upticks.
Future Outlook: Navigating Changes in Rental Dynamics
Looking ahead, rental conditions are poised to undergo a shift. Factors such as a peak in net overseas migration, normalization in household size, and the impact of 'HomeBuilder' completions are expected to contribute to rising vacancy rates and slower rental growth.
While build-to-rent developments may gradually alleviate rental supply constraints, significant increases in supply aren't anticipated until at least 2025.
Final Thoughts
As real estate agents, it's imperative to stay informed about the nuanced dynamics shaping Australia's housing market. By understanding these trends and anticipating future shifts, we can better serve our clients and provide them with tailored advice to navigate the ever-evolving landscape of real estate investment and homeownership.
