Property slowdown prompts price slump predictions
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What they said: CoreLogic's slowing property values has prompted AMP chief economist Shane Oliver to tip price drops for the first part of 2024. "We expect property prices to fall 3 to 5% this year, but with rate cuts providing relief in the second half," he said. "We have been concerned for some time that the rise in property prices in 2023 was running ahead of itself with a high risk of another leg down. With momentum slowing sharply this may be starting to unfold."
Oliver said in a note that it was worth "keeping an eye on" the downside risk to the economy, despite it not being the financial services company's central scenario. While the current housing shortage is expected to limit any price declines, he warned that a deep recession and sharp rise in unemployment could offset this undersupply. In this scenario, prices would fall below their recent January lows resulting in an 8% or higher decline in home values.
Australian house price growth slips
The news: Australian housing prices scraped in the smallest monthly gain since February for the final month of 2023, according to housing market research firm CoreLogic.
The numbers: Over December, national property prices were up 0.4%. It was a relatively sluggish month, with home values across the country ending up 8.1% for the year. Perth was the top performing capital city for December with dwelling values up 1.5% to a median $660,754. Adelaide and Brisbane had the next highest growth of 1.3% and 1% respectively. Sydney prices climbed 0.2% while Melbourne homes dipped 0.3%.
The context: CoreLogic research director Tim Lawless said monthly growth in home values peaked in May at 1.3%. Cost of living pressures, affordability challenges and rising stock levels were some reasons why price growth eased in the second half of 2023. The disparity between the price increases in Adelaide, Brisbane and Perth compared to Sydney and Melbourne was due to supply and demand, Mr Lawless said. Housing supply in Adelaide, Brisbane and Perth had remained below average and affordability had not been as pressing.
The source: CoreLogic
