01.11.2023

CoreLogic Home Value Index Sees Modest Increase in October Amid Emerging Risks Research News

CoreLogic’s national Home Value Index (HVI) witnessed a notable increase of 0.9% in October, a slight acceleration from September's revised 0.7% rise. This uptick follows a trend of steady growth since January, resulting in a cumulative 7.6% increase. The index is now just 0.5% shy of the historic peak set in April of the previous year.

Tim Lawless, CoreLogic’s research director, anticipates a record high for the national HVI is imminent. “Given the current growth rate, we expect the national HVI to surpass the previous record by mid-November, rebounding from the 7.5% decline experienced from May 2022 to January 2023,” he explained.

Despite a consistent rise in housing values across most major cities, quarterly growth has a noticeable deceleration. The three months ending June 2023 saw a 3.7% increase in capital city home values, which has since slowed to 2.6% in the quarter ending October.

Mr Lawless attributes this deceleration to increased listings and affordability challenges. “With more properties hitting the market and high-interest rates dampening buyer enthusiasm, it’s unlikely demand will keep pace as we head deeper into spring,” he stated.

October saw increases in dwelling values in all capital cities except Darwin, which experienced a minor 0.1% decline. Perth, Brisbane, and Adelaide led the pack with rises of 1.6%, 1.4%, and 1.3% respectively.

Year-to-date, three capitals have seen more than 10% growth in dwelling values: Sydney (10.9%), Perth (10.8%), and Brisbane (10.2%). Brisbane's housing market achieved a notable milestone in October, recovering from an 8.9% dip to a record high. After returning from earlier downturns this year, Perth and Adelaide also reached new highs. However, Sydney, Melbourne, and Hobart remain below their peak levels.

In comparison, regional markets have been trailing behind their urban counterparts. The combined regional index rose by 0.7% in October, slightly less than the 0.9% increase in the combined capitals. This pattern of higher growth in capital cities was consistent across all states.

"Though growth is more modest, all regional areas except for Tasmania saw a rise in home values over the month," Mr Lawless noted. "Regional Queensland, WA, and SA, in particular, are experiencing robust conditions, all reaching record highs in October."

Of the 307 SA3 regions analysed nationally, 41 (13.4%) experienced a decline in value over the past three months, predominantly in Regional Victoria and Regional NSW.

"Regional Victoria is facing particularly soft conditions, with housing values nearly flat and significantly below the May 2022 peak. This is occurring against a backdrop of rising stock levels and reduced sales activity," Mr Lawless concluded.

For more information, please visit the original article by Core Logic.

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