Australian housing values increased by 0.6% in June, representing the fifth consecutive month of growth after the -0.3% decline recorded between November and January.
Nearly all major regions across Australia posted monthly gains, with Hobart (-0.2%) standing out as the sole capital city or rest-of-state market to experience a decline on a month-on-month basis.
During the June quarter, national dwelling values advanced by 1.4%, building on the 0.9% increase observed in the first quarter and following a marginal -0.1% decrease in Q4 of the previous year. With the exception of Regional Tasmania, which fell by -0.4%, all capital cities and other regional markets registered value growth over the quarter.
“The first rate cut in February was a clear turning point for housing value trends. An additional cut in May, and growing certainty of more cuts later in the year have further fuelled positive housing sentiment, pushing values higher.”
Despite the recent recovery in housing values, transaction volumes remain subdued. For the first half of the year, annualised housing turnover—calculated from estimated sales as a percentage of total dwelling stock—stands at 4.9%, marginally below the ten-year average of 5.1%. On the supply side, the volume of advertised listings is also constrained, sitting 5.8% lower than at the same point last year (using data from the four weeks ending 29 June) and 16.7% beneath the previous five-year average.
“Although demonstrated demand is tracking slightly below average, advertised supply is scarce, creating a more balanced market for buyers and sellers. Improved selling conditions can be seen in auction clearance rates, which have risen to slightly above the decade average in the last two weeks of June, holding around the mid 60% range.”
Examining the underlying trends, aggregated capital city markets have outperformed regional areas for a second consecutive month, reversing the pattern of regional outperformance observed earlier in the cycle.
While regional Australia recorded a stronger quarterly growth rate of 1.6% compared to 1.4% across the combined capitals, emerging market dynamics suggest that capital city markets are poised to assume the lead in quarterly growth over the coming months.
Among the individual capital cities, Darwin recorded the strongest quarterly growth, with dwelling values increasing by 4.9%. A 1.5% uplift in June alone propelled Darwin’s dwelling values to a new historic peak, finally exceeding the previous high established during the mining boom in May 2014.
Excluding Darwin, the strongest quarterly performers among the capitals were Perth, with dwelling values rising 2.1%, and Brisbane, up 2.0%. Notably, these markets have also dominated the five-year growth rankings, with Perth values increasing by 81.1% and Brisbane by 75.1% since June 2020.
With a 3.4% increase recorded over the financial year, national home values appear to be emerging from a cyclical low. Given the renewed momentum in price growth observed over the past five months, it is anticipated that this annual figure will continue to strengthen through the second half of the year.
Extrapolating the quarterly results on an annual basis indicates a national growth rate of 5.8%, marginally outperforming the decade average of 5.2%.
“Given the upside risk that housing values will accelerate further from here as interest rates reduce, the reality is we will likely see home values rise by more than this over the coming 12 months,” said Mr Lawless.