Dwelling costs in Australia bounced in February because the housing market downturn misplaced its momentum amid restricted provide and sustained purchaser demand, in keeping with the PropTrack Dwelling Worth Index.
“In current months, the housing market correction has misplaced momentum, with the tempo of value falls easing in most markets,” mentioned Eleanor Creagh, PropTrack senior economist and report writer. “After revised nationwide residence costs recorded a small (0.09%) uplift in January, costs elevated an extra 0.18% in February 2023.”
All capitals noticed costs rebound, apart from Hobart (-0.29%), with Adelaide (+0.44%), Sydney (+0.36%), and Melbourne (+0.18%) recording the most important jumps as tight inventory ranges have stored competitors concentrated, insulating residence values. Costs elevated in Brisbane (+0.12%), Perth (+0.13%), and Darwin (+0.04%), whereas costs in Canberra had been unchanged.
Whereas rates of interest have been a major driver of residence value falls thus far, different components are additionally at play, together with the provision of properties on the market.
“Sellers in market now are benefiting from low competitors with different distributors, as consumers vie for obtainable inventory,” Creagh mentioned. “The constrained stage of properties obtainable on the market is ‘placing a flooring’ underneath residence costs and has concentrated purchaser demand. The longevity and depth of the present downturn can be influenced by the extent of provide, in addition to the trajectory of rates of interest, within the months forward.”
This was the case for all capital cities besides Hobart, the place whole listings elevated greater than 30% in comparison with the earlier five-year common. That improve in selection has eased competitors and demand per itemizing has virtually halved in Hobart prior to now yr.
Whereas most markets noticed residence costs fall from their peak, costs nationally remained 29.4% above their pre-pandemic ranges.
Creagh mentioned that if the money price lifted one other 25bp in March to three.6% as anticipated, it’ll additional scale back borrowing capacities.
“Nevertheless, if provide stays restricted, this may assist counter the downward strain on residence costs,” she mentioned. “Optimistic demand drivers stemming from the shortages in rental provide and rebound in worldwide migration additionally stay.”
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