Housing upswing carries into 2024 with national dwelling values rising 0.4% | Corelogic Home Value Index

Australia’s housing upswing continued through the first month of 2024 with CoreLogic’s national Home Value Index (HVI) rising 0.4% in January.

Up from the 0.3% increases seen in November and December, this marks the 12th straight month of value rises.

Beneath the headline result, housing market performance remains diverse around the country.

Three capitals recorded a subtle decline over the month (Melbourne -0.1%, Hobart -0.7% and Canberra -0.2%), while, Perth, Adelaide and Brisbane values continued to rise at the monthly rate of 1% or more.

Source: Corelogic February 1st 2024

Perth home values rose a further 1.6% in January, on par with the city’s growth trend in November and December and only slightly lower than the recent high of 1.8% recorded in October.

The Western capital continues to see housing demand outweigh supply, helping to push values 16.7% higher over the past 12 months.

Despite that, housing prices remain relatively affordable compared with most capital cities, with the median dwelling value sitting just under $677,000.

House values have continued rising at a faster rate relative to unit values in January, with the gap between the median capital city house and unit values rising to a record high of 45.2% in January.

Across the combined capitals, detached housing values rose by half a per cent over the month, adding the equivalent of around $4,800 to the median house value while units increased a smaller 0.1%, equivalent to a $900 lift.

Since the commencement of the upswing, capital city house values have surged 11.0% higher while unit values are up 6.9%.

It seems that most Australians are willing to pay a higher premium than ever for a detached home.

Regional markets are now showing a stronger trend in value growth relative to the capital cities

The combined regional index rose 1.2% over the rolling quarter compared with a 1.0% rise across the combined capitals index.

While both the combined capitals and combined regional markets are losing momentum in the pace of value growth, the capital city trend has slowed more sharply, mostly due to the flattening of growth conditions in Melbourne and Sydney.

Across the other states, regional WA, SA and Queensland continue to record a slower pace of growth relative to their capital city counterparts; these are also the three regional markets where dwelling values are at record highs.

Despite worsening housing affordability, the volume of home sales has held slightly above average over the past three months

CoreLogic estimates there were 115,241 dwellings sold over the three months ending January; 11.9% higher than the same period last year and 0.5% above the previous five-year average for this time of the year.

Despite the ongoing cost of living pressures, high interest rates, low consumer sentiment and affordability constraints, homes are still selling.

Housing demand has been buoyed by high migration, but also tight rental markets that have probably incentivised renters to transition towards home ownership if they can afford to do so.


The housing market has started the year on a similar footing to where it left 2023 with values generally trending higher, albeit with significant diversity across the regions and housing types.

The key factors shaping the outlook for 2024 are also diverse, with the path of inflation, interest rates, credit policy, consumer sentiment and demographic trends central to the direction of housing markets.

Inflation has been moderating since moving through an annual peak at the end of 2022 of 7.8%, falling to 5.3% in September last year.

The expectation is that CPI will continue to trend lower, potentially beating the RBA forecast of 4% annual headline CPI by the middle of 2024.

Lower inflation should help to bring the cash rate down, but also provide some support for consumer sentiment as cost of living pressures subside.
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The cash rate looks to have peaked at 4.35%, well above the pre-COVID decade average of 2.55%.

A loosening in monetary policy settings is likely to be a cautious and gradual process, with most forecasts indicating the cash rate will reduce by 25 basis points towards the end of the year, with further moderation of rates in 2025.

While lower interest rates will improve borrowing capacity and help to lift sentiment, we would need to see the cash rate drop by almost 1.8 percentage points, equivalent to more than seven ‘standard’ 25 basis point cuts, before rates return to the pre-COVID decade average.

Credit policy and macroprudential settings could be key determinants of housing outcomes in 2024.

One of the biggest hurdles in the way of a material lift in home purchasing demand is the 3 percentage point buffer applied to borrower’s home loan serviceability assessments.

Potentially we could see APRA adjust the buffer back to its previous setting of 2.5% as interest rates fall, however, there is no guarantee this will be the case.

Holding the serviceability buffer at the current setting of 3 percentage points could provide APRA with some assurance of reduced credit risk.

Although housing outcomes are outside of APRA’s mandate, holding the serviceability buffer firm or pulling other policy levers such as loan-to-income ratio or debt-to-income ratio limits could minimise the chance of a home price surge as interest rates fall.

Consumer sentiment has been in deeply pessimistic territory since mid-2022, with the monthly measure from Westpac and the Melbourne Institute lower again in January.

High cost of living pressures and high-interest rates have been influential in keeping sentiment close to recessionary lows.

Historically there has been a strong correlation between consumer confidence and home purchasing activity.

Although this relationship has diverged a little in 2023, which is probably attributable to high migration and unusually tight rental conditions, any lift in consumer attitudes should play out positively for housing market activity.

With inflation easing and the prospect of rate cuts later this year, we should eventually see sentiment moving higher.

Migration patterns are clearly changing, with a peak in overseas migration last year, a normalisation in regional migration trends and an easing in some of the more extreme interstate movements.

Less overseas migration should help to ease rental demand, especially in the largest capitals where a higher portion of overseas migrants have settled historically.

From a purchasing perspective, there is a lag in home-buying activity from permanent migrants, suggesting we are likely to see the recent peak levels of migration flow through to purchasing activity over the coming years.

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