National home values slip for first time in almost two years
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The news: Property prices slid into negative territory at the end of 2024, falling 0.1% in December after a flat November. Over 2024, national home values were up 4.9%.
The dip in values follows a boom in the first half of the year that started to ease as higher interest rates and affordability constraints hit the market.
The rental market also appears to be slowing down.
The numbers: Property prices fell 0.7% in Sydney, 0.7% in Melbourne, 0.5% in Hobart and 0.5% in Canberra over December. There were increases in Brisbane (0.5%), Adelaide (0.6%), Perth (0.7%), and Darwin (0.4%). The combined capitals fell 0.2% over the month, while combined regional areas increased 0.2%.
Over the quarter, Sydney home values fell 1.4%, with falls of 1.8% in Melbourne and 0.3% in Canberra. Hobart was flat. The biggest increase was in Adelaide, at 2.1%, followed by Perth (1.9%), Brisbane (1.3%) and Darwin (0.6%). The combined capitals declined 0.5% over the quarter, with regional areas up 1%.
On an annual basis, Melbourne fell the most at 3%, followed by Hobart, down 0.6%, and Canberra, down 0.4%. Sydney values increased 2.3% over the year, with Darwin up 0.8%. The biggest gains were seen in Perth, up 19.1%, Adelaide, up 13.1%, and Brisbane, up 11.2%.
The median dwelling value — a measure that combines houses and apartments — in Sydney is now $1,191,955, with Melbourne at $774,093. Brisbane remains the third most expensive city on a median basis, at $890,746, followed by Canberra at $844,277. Only Hobart, Melbourne and Darwin have median home values below $800,000.
The rental market is also showing signs of cooling, with the national rental index up 0.1% in December, up 0.4% over the final quarter and 4.8% over the year. This is the smallest quarterly since 2018, but the annual change in national rents is twice that of the pre-pandemic decade average and rental stress is expected to remain high.
What they said: “This result represents the housing market catching up with the reality of market dynamics," CoreLogic research director Tim Lawless said.
“Growth in housing values has been consistently weakening through the second half of the year, as affordability constraints weighed on buyer demand and advertised supply levels trended higher," he said.
“With worsening affordability constraints and reduced borrowing capacity, we have seen buyer demand pushed towards lower priced markets, which has, in turn, supported stronger growth conditions in these areas."
The source: CoreLogic Home Value Index report
