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Australian house prices rise for 14th month in a row
Australian housing prices have risen for the 14th-straight month, but the pace of growth in November was the slowest since January, indicating the latest boom may be nearing its peak.
Key points:
- Housing prices rose 1.3 per cent nationally in November, with regional markets up 2.2pc and capital cities 1.1pc
- Hobart had the biggest capital city price increase over the past year (27.7pc) while Perth had the smallest rise (14.5pc)
- The number of homes listed for sale in Sydney and Melbourne has recently increased
The latest CoreLogic home value index showed Sydney and Melbourne were driving the slowdown in growth, although Perth had an even smaller increase and prices in Darwin actually fell last month.
CoreLogic noted that after a period in which there had been a shortage of properties listed for sale in Australia's two biggest cities, Sydney listings were now back just below the five-year average, while Melbourne's were 8 per cent above.
"There's slowing momentum across Sydney and Melbourne in particular, which is reflective of the fact that stock levels across those cities have pretty well normalised," CoreLogic's head of residential research Australia, Eliza Owen, said.
"But if you look at smaller capital cities and regional Australia, where stock levels are still around 30 per cent below their five-year average, there is still that urgency in the market, and it's leading to a further increase in momentum."
Ms Owen said it was possible that some of the increase in the big-city listings related to Sydneysiders and Melburnians selling up to move elsewhere, but there also seemed to be an increase in property investors selling.
"We have seen a lot of the increase in for-sale listings coming from some of the more concentrated investor markets in the inner cities as well," she said.
"That could be reflective of investors looking to cash out at what they perceive to be the top of the market, which could also be a reaction to the kind of announcement effect of APRA (regulator the Australian Prudential Regulation Authority), you know, signalling tighter lending conditions."
While the two big cities have reported a slowdown, growth rates in Brisbane and Adelaide still have not peaked, sitting at 2.9 and 2.5 per cent respectively last month.
House prices tipped to fall as interest rates rise
However, Ms Owen noted big bank and other analyst forecasts of national housing price declines in 2023.
"It makes sense that we would see downward pressure on prices in response to increased interest rates, especially given that interest rates seems to have been one of the major drivers of the current upswing," she told ABC News.
"I think the extent of the downturn and the timing of the downturn really does come back to when the RBA would make moves on the cash rate.
"But already we're seeing average fixed rates are rising for new borrowers, and that's probably going to put some downward pressure on demand in the coming months as well."
Affordability, or the lack of it, also seems likely to halt the latest housing boom.
Ms Owen noted that, despite a slowdown in growth to 1.1 per cent last month, Canberra was on the cusp of joining Sydney as the second capital city with a median house price above $1 million.
The Canberra median house value was $999,755 in November, according to CoreLogic's data.
Melbourne's median house price was not far behind at $986,992.
Regional markets also continued to see large price increases at an average of 2.2 per cent across the country last month and 25.2 per cent over the past year.
That has left the typical house in regional Australia worth $545,063, with the most expensive property in regional NSW at $695,251.