Property market rebound sputters as price growth eases

The upward trend in national home prices continues for the fifth month, but there are signs the property market rebound is losing steam.

Tim Lawless spi

CoreLogic’s Home Value Index rose 0.7 per cent in July, with a property in the country now having an average price tag of $728,831.

While housing values continue to record a broad-based rise, CoreLogic noted the rate of growth has lost momentum over the past two months, slowing from 1.2 per cent in May.

Brisbane tied with Adelaide in recording the strongest house price growth among the eight capital cities last month, with house values up 1.4 per cent across both cities to $735,394 and $671,755, respectively.

CoreLogic research director Tim Lawless pointed out that the most significant slowdown in growth has been recorded in Sydney, with median value now at $1,082,129.

“After leading the upswing, the monthly pace of growth in Sydney housing values has halved from a recent high of 1.8 per cent in May to 0.9 per cent in July,” the expert said.

Elsewhere around the country, Perth recorded the second-strongest monthly growth of the capital cities at 1 per cent, with the city now touting a median dwelling price of $598,074.

The West Australian capital is followed by both Melbourne and Darwin at 0.3 per cent, with median property values of $766,912 and $488,363, respectively.

Canberra is the only capital city to record a decline in values in July down 0.1 per cent to a median price of $839,507 while Hobart values remain unchanged at $655,984.

The report noted the monthly performance across capital cities has a strong correlation with the new listings coming into the market during the period.

For example, although the trend in new listings has risen in the growth leaders Brisbane and Adelaide, Mr Lawless said the number remains well below levels from a year ago and the previous five-year average.

He highlighted the opposite trend has been observed in the NSW capital. “Sydney has also seen a significant rise in the number of fresh listings added to the market, 9.9 per cent higher than the same time last year and 18 per cent above the previous five-year average.

“An increased flow of new listings provides more choice and may be working to reduce some of the urgency felt among prospective buyers,” he added.

Besides the impact of listings weighing down on growth, Mr Lawless said the slowdown has been primarily driven by a moderation in gains observed in the higher-priced segment of the property market, while the lower and middle market shows resilience in July.

“Some resilience in growth across the middle and more affordable end of the market aligns with housing finance data, which has shown a stronger bounce-back in the value of lending to first-home buyers and investors over recent months,” he said.

Mr Lawless explained these segments “tend to be more active across the middle to lower end of the pricing range”, where competition to purchase a home may be “more intense”.

“Premium housing markets tend to lead the cycles, so the slowdown in the pace of growth could be a sign of a broader easing in the pace of growth over the coming months,” he said.

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