October 2024 Property Market Update

Phil Brown 31 October 2024

Growth Softens: Australian Property Market Faces a Defining Moment

The Australian property market is showing a nuanced shift, with home values experiencing some softening over recent months. According to CoreLogic’s latest Monthly Property Update for October 2024, covering data up until the end of the September quarter, national home values rose by 1.0% in the September quarter, which is the softest quarterly rise since the three months to March 2023 (1.0%). Despite this easing, many regions are still showing strength, with record highs in several key cities. Queensland, in particular, has demonstrated resilience with Brisbane reaching new heights. The dynamics in Queensland are characterised by continued strong buyer demand amidst tight supply, which is helping to support price growth even as the broader market slows.

 

Record Highs for Sydney, Brisbane, Adelaide, and Perth

Sydney, Brisbane, Adelaide, and Perth continue to defy broader market trends, reaching record-high dwelling values as of July. Notably, Perth led the charge with a monthly dwelling value increase of 2.0%, taking its annual increase to an impressive 24.7%. Brisbane followed with a robust annual increase of 16.0%, while Adelaide registered a steady 15.5% growth.

The resilience in these cities highlights a combination of strong demand and limited supply, particularly in the face of changing economic conditions. Perth’s sustained growth can be attributed to heightened buyer activity amidst comparatively lower dwelling prices, making it an attractive market for investors and first-time buyers alike.

 

Transaction Volumes on the Decline

Annual transaction volumes have shown signs of tapering, potentially indicating that the market is moving past its peak activity period. CoreLogic’s estimates suggest 522,317 sales were recorded in the 12 months to September, down slightly from 524,442 in the year to August. However, despite the month-on-month decline, transaction levels remain strong—9.3% higher than last year and 5.1% above the five-year average. This suggests that although the frenetic pace of sales may be easing, demand for housing remains robust.

 

Selling Conditions Toughening for Some States

The average number of days on the market increased to 32 days in Q3, up from 29 days in Q2. This rise is primarily being driven by slower sales times in Sydney, Melbourne, and Hobart, where demand appears to be cooling. The upward trend in days on the market suggests that buyers are becoming more selective, and properties may not be flying off the shelves as quickly as earlier this year.

Vendor discounting remained relatively steady at -3.7% nationally over the quarter. This reflects a slight shift towards a buyer’s market, where sellers need to adjust their expectations and be open to negotiation to secure a sale. Particularly in markets where conditions have softened, vendors are feeling the pressure to be flexible on price.

 

Listings Reflect Steady Market Dynamics

In the four weeks leading up to 6 October, new property listings totalled 42,479 nationally, which is 2.1% higher compared to the same period last year, and 8.2% above the historic five-year average. Total advertised listings were steady at 136,135 properties during the typically quiet winter period, signalling continued demand despite the seasonal lull.

Interestingly, the levels of advertised listings in Western Australia, South Australia, and Queensland remain lower compared to this time last year, supporting ongoing value growth due to constrained supply. In contrast, listing numbers in Victoria and Tasmania are accumulating, contributing to softer market conditions in these states. The regional differences point to an increasingly divergent market, where location-specific factors are influencing property value trends and buyer sentiment.

 

Navigating a Shifting Market

The property market’s performance over the past few months suggests a transition from the rapid growth seen in 2023 towards a more moderated phase. While some areas, particularly Perth, Brisbane, Adelaide, and Sydney, remain strong, others are experiencing cooling conditions as buyer behaviour evolves.

For both buyers and sellers, understanding these emerging trends is crucial for making informed decisions. Buyers might find more opportunities in regions with higher listing accumulation, while sellers in high-demand areas such as Perth may still benefit from limited supply. Keeping abreast of CoreLogic’s Monthly Property Update will be key to staying informed and navigating these shifting market dynamics.

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