The movement of dwelling prices in April serve as further proof that the downturn in the housing market is over.
This was according to CoreLogic, which showed a second consecutive growth in dwelling value index in April at 0.5%, with Sydney’s 1.3% monthly gain leading the charge.
After dwelling prices have fallen 9.1% between the period of consecutive rate rises in May 2022 and February 2023, it appears they already have bottomed out. In fact, the gains achieved in April followed the 0.6% growth recorded in March.
CoreLogic research director Tim Lawless said the latest readings do not just reflect the stabilisation of the market but also the apparent upside in many of the housing indicators.
“Auction clearance rates are holding slightly above the long run average, sentiment has lifted, and home sales are trending around the previous five-year average,” he said.
While housing conditions are looking more positive, values across most regions appear to be well below their recent cyclical highs.
Overall, regional markets are showing greater diversity — while values are generally stabilising or rising in most regions, New South Wales and Victoria were the only ones to record a fall in the month.
Positive gains despite above average interest rates
Mr Lawless said it is notable that the trend towards a more positive housing market sentiment is happening while interest rates are well above average.
“The last time we saw housing values trending higher through a rising interest rate environment was during the mid-to-late 2000’s when the mining boom was underway,” he said.
“This period was also characterised by surging net overseas migration that contributed significantly to housing demand.”
The growing expectation that the rate hike is almost over is a crucial factor supporting the current housing demand.
Mr Lawless said the substantial lift in net overseas migration has run headlong into a lack of housing supply.
While net overseas migration typically has a more direct correlation with rental demand, Mr Lawless said it is reasonable to assume that more people are fast tracking their purchasing decision simply because they cannot find rental accommodation, given that vacancy rates are holding around or below 1% in most cities.
“Many prospective vendors have stayed on the sidelines through the downturn, keeping inventory at below average levels and providing sellers with some leverage at the negotiation table,” he said.
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| Lender | Home Loan | Interest Rate | Comparison Rate* | Monthly Repayment | Repayment type | Rate Type | Offset | Redraw | Ongoing Fees | Upfront Fees | Max LVR | Lump Sum Repayment | Additional Repayments | Split Loan Option | Tags | Features | Link | Compare | Promoted Product | Disclosure |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
6.04% p.a. | 6.06% p.a. | $3,011 | Principal & Interest | Variable | $0 | $530 | 90% | 4.6 STAR CUSTOMER RATINGS |
| Promoted | Disclosure | |||||||||
5.99% p.a. | 5.90% p.a. | $2,995 | Principal & Interest | Variable | $0 | $0 | 80% |
| Disclosure | |||||||||||
6.14% p.a. | 6.16% p.a. | $3,043 | Principal & Interest | Variable | $0 | $350 | 60% |
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