Summary
Housing values posted a broad-based rise in February, with CoreLogic’s National Home Value Index up 0.6%.
This was a 20 basis point acceleration from the 0.4% increase seen in January and the strongest monthly gain since October last year.
Each of the capital cities and rest-of-state regions recorded a lift in values over the month, except Hobart, where the market was down 0.3%.
The monthly pace of growth in Sydney home values inched a little higher in February, up 0.5% following a mild 0.2% rise in January.
The ongoing rise in values reflects a persistent imbalance between supply and demand, which varies in magnitude across the cities and regions.
These gains over the past two months followed a subtle decline in values through November and December.
The lifting growth was accompanied by a pickup in auction clearance rates through February, with the month averaging a clearance rate of 73%, up from 55% at the end of last year.
Stronger conditions are now evident across the lower quartile of the market, where values rose 1.4% over the rolling quarter, compared with a 0.2% rise in upper quartile values.
Potentially, we’re starting to see some early signs of a boost to housing confidence, as inflation eases and expectations for a rate cut, or cuts, later this year, firm up.
The re-acceleration and value growth have been accompanied by a bounce back in auction clearance rates and in consumer sentiment.
Despite the pickup in values, the volume of sales over the past three months was estimated to be 8.5% lower than at the same time last year, suggesting affordability constraints are starting to bite.
Growth in rental values has also re-accelerated through early 2024, with a monthly pace of change rising to 0.9% in February, the highest reading since March last year.
This re-acceleration also saw the rolling quarterly change in rents rise to 2.4%, the highest since May last year.
The pickup in rents is mostly a seasonal phenomenon, with the first quarter of the year historically showing an accelerating trend.
However, there’s also been a pickup in the annual growth trend for rents, with the national rental index up from a recent low of 8.1% in October last year to 8.5% over the 12 months ending February.
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