Housing report shows SE-Qld & Nth-NSW positive, while Melbourne & Sydney in negative territory
Housing report shows SE-Qld & Nth-NSW positive, while Melbourne & Sydney in negative territory
Cotality’s national Home Value Index (HVI) shows a slightly positive result for Brisbane which rose 0.3% and which reflects similar positivity from the Northern NSW Border region and greater Southeast Queensland, with the only other positive being Perth with a 0.7% rise, and Adelaide values remaining unchanged.
Overall the HIV dropped 0.4% in June, driven by a 1.2% decline in Sydney home values and a 1.0% decline in Melbourne.
Capital city home values fell by 1.3% over the June quarter, led by Sydney (-3.2%) and Melbourne (-2.6%), marking a significant shift in Australia’s housing dynamic.
Softening conditions are evident in auction clearance rates dropping below 50% since late May, alongside capital city home sales falling 16.2% compared to last year and rising advertised stock levels.
Regional markets continue to outperform capital cities, with the combined regional index increasing by 0.3% in June and 1.1% over the quarter.
Rolling 3 Month Change In Dwelling Values Combined Capitals V Combined Regionals
Regional Vic recorded the weakest result, with values down 0.1% in June, while values were flat across regional NSW over the month.
Regional WA remains the strongest market across the broad regions of Australia, with values up 3.7% in the June quarter.
Housing market conditions have weakened further through June, with a broader range of headwinds now weighing on demand.
The slowdown has been building for some time, initially through stretched affordability and serviceability constraints.
Consumer sentiment remains deeply pessimistic, and this is likely to keep a lid on housing activity.
The Westpac –Melbourne Institute Consumer Sentiment Index fell 2.9% in June, with households reporting renewed pressure on family finances alongside a worsening in house price expectations.
Low confidence tends to show up in weaker turnover, as households delay high-commitment decisions.
The Federal Budget has added to the downside risk to housing demand.
Proposed changes to negative gearing and capital gains tax settings are expected to bring about a sharp pullback in investor demand for established dwellings.
This comes at a time when investors were a major source of demand across many markets and follows a broader accumulation of disincentives, including higher holding costs and tighter serviceability assessments.
The policy aim is to redirect capital toward newly built supply, but the near -term effect is more likely to be weaker demand for established housing, detracting from aggregate housing demand.
The change in market conditions is already visible in the high-frequency indicators.
Auction clearance rates have moved materially lower, with the combined capitals clearance rate falling below the 50% mark in late May and tracking well below decade averages.
At the same time, advertised listings are trending higher across most markets, with Sydney, Melbourne and the ACT already seeing above - average stock levels.
The combination of weaker clearance rates and higher listings is a clear sign that buyers are regaining leverage.
Supply -side fundamentals are still helping to cushion the market, but they are not carrying the same weight as they were earlier in the cycle.
New housing supply remains constrained, and even where approvals and commencements have improved, it will take time for this to flow through to completions.
Population growth is still adding to underlying housing demand and rental markets remain tight, but these forces are increasingly being offset by affordability barriers, tighter credit conditions and weaker confidence.
