Backed by the latest research and data, CoreLogic is an independent property analytics company that strives to provide those interested in the Australian housing market with the most accurate and relevant information. As the saying goes, power is knowledge acted upon, and as such, CoreLogic property data is an invaluable asset for investors who want to make more informed decisions.
With over 11 million residential properties across Australia, there is a wealth of data available for investors looking to enter or expand their portfolio in this market.
As of May 2024, the Australian residential housing market was worth $10.6 Trillion, making it one of the most valuable housing markets in the world. Home values across the country rose steadily by 1.8% in the last quarter, led by Perth (6%), Adelaide (3.3%), and Brisbane (3.1%). Melbourne was the only major city that saw neither a rise nor fall in home values (0.0%).
Nationally, after achieving a record 9.2% gain over the 12 months leading up to February, the growth trend in housing values eased slightly to 8.7% over the year to April. This data from CoreLogic reveals that the Australian housing market is stable and robust, having fully recovered from the impacts of the COVID-19 pandemic.
The residential property market plays a significant role in the overall wealth of Australians. According to CoreLogic’s latest report, residential real estate makes up 56% of total household assets. As housing values tend to double every 10 to 15 years, it is no surprise that property investment is a common wealth-building strategy for many Australians.
Property remains a tangible and physical asset, providing investors with a sense of security and stability. Additionally, the continuously growing population in Australia drives demand for housing, making it a steady investment option with long-term potential. While the share market is subject to volatility and economic changes, the property market has been more resilient and stable over time.
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A key factor driving the consistent increase in home values is the Reserve Bank of Australia’s (RBA) decision to maintain the official cash rate target at 4.35%. Fuelling buyers and investors with confidence, the RBA’s low-interest rates have made it easier for people to borrow money and enter the property market. This has also led to increased competition among buyers, resulting in steady price growth across most regions in Australia.
Investors can also benefit from the rental market, with rental yields averaging at 3.4%. Over the first quarter of this year, the median rent price for houses in Australia reached $600 per week. While this figure varies greatly depending upon location and type of property, it remains a strong indicator of the growing demand for rental properties.
PropTrack senior economist, Eleanor Creagh, attributed the 17th consecutive month of price growth to the severe supply shortages plaguing the nation.
“Despite a rise in the number of homes for sale this year, strong population growth, tight rental markets, and home equity gains continue to bolster strong demand. Meanwhile, building activity remains challenged by capacity constraints and higher costs, with consequent tight housing supply pushing prices and rents higher,” Creagh said.
Australia’s housing shortage combined with strong population growth, has resulted in a steady demand for housing, particularly in major cities such as Sydney and Melbourne. This has led to consistent growth in property values over the years, making it a reliable investment option.
CoreLogic’s Home Value Index (HVI) measures housing growth across Australia’s major cities, providing an insight into the different stages of the property cycle.
Over the 28 days ending May 8th, the rolling 28-day change in the combined capitals’ Home Value Index rose by 0.6%. This marks a slight increase from the 0.5% growth observed throughout much of April. City-by-city, Perth showed the most growth over the 28-day period at 2.0%, followed by Adelaide (1.3%) and Brisbane (0.9%). Sydney and Darwin also experienced modest growth at 0.4% and 0.6%, respectively.
Despite the current economic climate and global uncertainty, real estate remains a powerful vehicle real for building long-term wealth.
Sydney
In April, Sydney’s dwelling values increased by 0.4%. Over the past year, values rose by 8.7%. Currently, they are just 0.8% below their record high set in January 2022. The consistent rise in Sydney property prices highlights why Sydney is still a major draw for both local and international investors.
Melbourne
In April, Melbourne bucked the positive trend observed across the other major cities and recorded a slight drop in dwelling values at -0.1%. Currently sitting at $941,698, the median Melbourne house price has remained close to the record highs observed in February 2022. Despite the slight dip, Melbourne continues to attract strong interest from investors and is expected to bounce back in the upcoming quarters.
Brisbane
Brisbane’s property market continues its impressive performance, recording a 0.9% increase in dwelling values over the past month. This brings the year-to-date growth to 16.1%, the second highest among the capitals. Drawn to the city’s favourable weather, not to mention its economic and population growth, Brisbane is proving to be an attractive option for both investors and homebuyers.
Adelaide
Adelaide is also experiencing a steady rise in property values, with a 1.3% increase over the past month and a 14% growth over the past year. With its affordable housing prices and strong rental yields, Adelaide presents an appealing opportunity for property investors.
Perth
The highest growth among the capital cities over the past year was recorded by Perth, with dwelling values increasing by 21.1%. This is a significant turnaround for Perth’s property market, which had been struggling in recent years due to the resource’s downturn. With improving economic conditions and strong population growth, Perth’s property market is expected to continue its upward trend.
Before purchasing an investment property, it is important to understand the current supply and demand in the market.
In the four weeks leading up to May 5th, new property listings totalled 39,072 across Australia, showing a slight increase and indicating an active market.
In capital cities, listing levels varied compared to the previous year. Melbourne saw a 10.6% increase in new listings, while Perth experienced a 24.9% decrease. This disparity helps explain differing trends in property value growth.
CoreLogic data also reveals a 7.3% increase in sales from last year, with capital city sales volumes up 9.2%.
These figures highlight robust activity in the Australian property market, buoyed by strong demand. For investors, the increase in new listings and sales volumes suggests a healthy and competitive market with ample opportunities for investment.
Across Australia, there has been an increase in rent prices over the past year, with capital cities recording a 9.4% increase and regional areas seeing a 6.3% rise. These price increases have been driven by low vacancy rates and strong demand from tenants.
Rental yields, which represent the percentage return on investment for a property, have been on the rise. Over the 12 months leading up to April, a gross rental yield of 3.75% was recorded, marking the highest national rate since October 2019.
For investors, this shows potential for strong returns on investment in the rental market, making it an attractive option for those looking to enter or expand.
CoreLogic’s detailed insights highlight a vibrant and dynamic Australian housing market brimming with opportunities for both seasoned investors and newcomers. The steady rise in home values, strong rental yields, and persistent demand for properties underscore a market poised for sustained growth and resilience.
Becoming informed about Australia’s housing market is one thing, but taking the leap into property investment is another. With the right research and guidance, investors can navigate this thriving market and take advantage of its potential for long-term success.
Ironfish has the expertise and resources to support investors in making informed decisions and achieving their investment goals in the Australian property market. With a range of exclusive properties, comprehensive research reports, and personalised investment strategies, Ironfish equips investors with the knowledge and tools they need to succeed.
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