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Highlights
- Housing prices in Australia grew at the slowest pace since early 2023.
- Key markets like Sydney and Melbourne saw declines in November.
- Rising property listings and economic factors are impacting the housing market.
The Australian housing market experienced a significant slowdown in November, marking its weakest pace of growth since January 2023, according to the latest report from CoreLogic. National housing prices edged up by just 0.1% during the month, signaling a deceleration in what has been a year of notable growth.
The report highlighted that affordability constraints, declining auction clearance rates, and an increase in property listings are among the factors influencing this trend. Over the past year, housing prices have risen 5.5%, bringing the national median value to A$812,933. However, key markets, including Sydney and Melbourne, saw declines in November, with Melbourne prices dropping 0.4% and Sydney recording a 0.2% fall.
Mixed Performance Across Cities
On a quarterly basis, four of the eight capital cities reported declining housing values. Melbourne led with a 1% decline, followed by reductions in Darwin, Sydney, and Canberra. In contrast, Perth demonstrated resilience, with a 1.1% increase in November and a quarterly growth of 3%. However, even Perth's growth rate has slowed compared to earlier in the year, marking its lowest pace since April 2023.
Surge in Listings Influences Market Dynamics
One of the primary factors contributing to the market's slowdown is a surge in property listings. Over the four weeks leading to November 24, advertised stock levels in capital cities were up by 16% compared to the end of winter. Perth and Adelaide saw the most significant increases, with listings rising by 33% and 25%, respectively. Both Sydney and Melbourne reached their highest levels of property listings for this time of year since 2018, adding pressure to the already slowing market.
Outlook for the Housing Market
While economic pressures continue to weigh on the housing sector, CoreLogic anticipates further price adjustments in 2025. Interest rate cuts expected next year are unlikely to deliver an immediate recovery, as affordability issues, shrinking savings buffers, and rising unemployment remain concerns.
Despite the national slowdown, the rental market saw modest growth in November, with rents increasing by 0.2%. This marks the smallest annual rise in rents since April 2021, providing some relief to tenants.
The report underscores the importance of monitoring economic conditions and housing supply dynamics in the months ahead as the market adjusts to these evolving pressures.
