Aussie home values up 0.6 per cent in March, breaking 10-month streak of falls

CoreLogic’s National Home Value Index (HVI) has reported the first month-on-month rise, since April 2022, with dwelling values increasing by 0.6 per cent in March.

This comes after values remained flat throughout February, at -0.1 per cent.

The four largest capital cities and a majority of the broad ‘rest-of state’ regions saw higher dwelling values, with a leading increase of 1.4 per cent in Sydney.

The most evident rise was in the most expensive quarter of Sydney’s market, at an increase of 2.0 per cent in March, whilst the upper quartile of the Sydney market saw a rise of 1.4 per cent throughout the month.

“Sydney upper quartile house values fell by -17.4% from their peak in January 2022 to a recent low in January 2023, the largest drop from the market peak of any capital city market segment. We may be seeing some opportunistic buyers coming back into the market where prices have fallen the most.”

The combined regional index also rose 0.2 per cent throughout the month, as values in regional West Australia (WA) and regional South Australia retained “cyclical highs”.

“The best performing regional markets are quite different to what we were seeing through the recent growth cycle,” said CoreLogic Research Director, Tim Lawless.

“In today’s market it is mainly rural areas that are seeing the strongest increases, rather than the commutable, coastal and lifestyle markets that were booming through the upswing.”

“However, we are seeing some subtle growth return to regions within commuting distance of the major capitals, after man recorded a sharp drop in values.”

Mr. Lawless suggests the increase can be explained by multiple factors including “extremely tight” rental conditions, low advertised stock levels and substantial demand from overseas migration.

“Although interest rates are high and there is an expectation the economy will slow through the year, it’s clear other factors are now placing upwards pressure on home prices,” said Mr. Lawless.

“With rental markets this tight, it’s likely we are seeing some spill-over from renting into purchasing.”

“Similarly, with net overseas migration at record levels and rising, there is a chance more permanent or long-term migrants who can afford to, will skip the rental phase and fast track a home purchase simply because they can’t find rental accommodation.”

Dwelling values in some areas have declined throughout March, however, with Hobart recording the largest drop in values alongside other capital cities, falling -0.9 per cent.

Canberra fell -0.5 per cent, Darwin fell -0.4 percent and Adelaide fell -0.1 per cent, as did regional Victoria. Regional Tasmania also saw a drop of -0.7 per cent.