Housing market recovery gathers pace

Oksana Patron

1 June 2023

The CoreLogic’s national Home Value Index (HVI) has recorded a third consecutive monthly rise as the index saw a sharp growth to 1.2% in May, helped by a ‘persistently low levels of available housing supply’.

By comparison, the home values in March and April grew 0.6% and 0.5%, respectively.

But despite the accelerated recovery , most housing markets across the country were still recording values well below their recent peaks.

Sydney continues to lead the recovery trend, posting a 1.8% lift in values over the month, recording the city’s highest monthly gain since September 2021. Since moving through a trough in January, home values have risen by 4.8%, or the equivalent of a $48,390 lift in the median dwelling value.

It was followed by Brisbane (1.4%) and Perth (1.3%) which were the only other capitals to record a monthly gain of more than 1.0%, however, the rise in values was broad-based with the rate of growth accelerating across every capital city last month.

At the same time, the trend in regional housing values has also picked up, with the combined regionals index rising half a percent in April, following a 0.2% and 0.1% rise in March and April.

CoreLogic’s research director, Tim Lawless, said that premium housing markets in Sydney continued to lead the recovery trend and after recording a larger drop in values, Sydney’s upper quartile (the most expensive quarter) stood out with the highest rate of growth, gaining 5.6% over the past three months compared with a 2.6% rise in more affordable lower quartile values.

“Buyers targeting the premium sector of the market are still buying at well below peak prices,” Lawless said.

“Although values across more expensive homes are rising more rapidly, at the end of May, dwelling values across Sydney’s upper quartile remained -11.8% below the January 2022 peak. This is the equivalent to a saving of around $213,000 from the cyclical high.”

The CoreLogic data also showed that advertised listings trended lower through May with roughly 1,800 fewer capital city homes advertised for sale relative to the end of April, with inventory levels sitting -15.3% lower than they were at the same time last year and -24.4% below the previous five-year average for this time of year.

“With such a short supply of available housing stock, buyers are becoming more competitive and there’s an element of FOMO creeping into the market,” Lawless added.

“Amid increased competition, auction clearance rates have trended higher, holding at 70% or above over the past three weeks. For private treaty sales, homes are selling faster and with less vendor discounting.”