Prime Highlights:
CoreLogic said its Home Value Index has fallen 0.1 per cent in December 2024, the first time in nearly two years.
The quarterly change of the national HVI reduced to 0.1% and yearly values increased to 4.9%, pushing the median house price by $38,000.
Declines in home values were reported for the year in Melbourne, Hobart, and the Australian Capital Territory.
Perth, Adelaide, and Brisbane have recorded strong annual growth, though growth rates have eased.
Background:
CoreLogic’s Home Value Index ended 2024 with a 0.1% decline in national home values, marking the first decline in nearly two years. The index had experienced steady growth throughout 2023 and declined in December before experiencing a 0.1% negative change for the quarter. That ended a resolute growth phase that began in February 2023 and persisted through October 2024, even in the face of headwinds from high interest rates and rising cost-of-living pressures.
According to CoreLogic research director Tim Lawless, the decline in December was inevitable as the housing market adjusted to changing supply and demand conditions. Affordability constraints are on the rise, which dampens buyer demand, and the supply of properties has increased.
The first half of the year 2024 recorded rises of 4.1% in national home values, while the second half only recorded an increase to 0.7% with five out of eight capital cities recording value declines. Nationally, home values increased to 4.9% for the year, lifting the median home price by about $38,000. In spite of the scenarios, Melbourne, Hobart, and the ACT recorded annual declines, while Perth and Adelaide will record strong growth, and Brisbane showed moderate growth.
Double-digit growth was recorded by the mid-sized capitals of Perth, Adelaide, and Brisbane, though these markets probably have peaked. In the December quarter, Adelaide outpaced Perth, whose values rose 2.1%, compared to Perth’s 1.9% and Brisbane’s 1.3%. Adelaide had low advertised stock levels, whereas Perth experienced an increase in supply, which resulted in a slowing down of growth.
Growth in 2024 was strongest at the lower end of the market, up 9.8%, as affordability pressures forced buyers to cheaper houses. Regional markets were also healthy, with a gain of 6.0% due to growth in Western Australia, South Australia, and Queensland.
