The Australian property market is finally showing signs of recovery, with home values rising by 0.6% in March, according to the latest Home Value Index (HVI) from CoreLogic. This marks the first month-on-month increase in values since April 2022.
The rise in home values was seen across the nation’s four largest capital cities and a majority of its “rest of state” regions. Sydney saw the largest increase in value at 1.4%, followed by Melbourne at 0.6%, Perth at 0.5%, and Brisbane at 0.1%. However, Hobart experienced a drop of nearly 1%, while Canberra, Darwin, and Adelaide also saw declines.
Despite the recent downturn, every capital and “rest of state” market in Australia is still above pre-COVID-19 levels, with Melbourne showing the slightest buffer between March 2020’s values and now at 0.6%.
According to Tim Lawless, CoreLogic’s research director, the rise in home values is due to several factors, including low supply, extremely tight rental conditions, and overseas migration demand. Advertised supply has been below average since September 2022, and with rental markets being tight, there is likely some spill-over from renting into purchasing.
Lawless also noted that net migration is still rising, with many people bypassing the rental phase and fast-tracking their home purchase because they cannot afford rental accommodation.
In terms of regional areas, rural areas are seeing the strongest increases rather than the commutable coastal and lifestyle markets that were booming through the upswing.
Despite the recent rise in home values, Lawless conceded that higher mortgage rates mean not everyone who wants to buy will be able to qualify for a loan.
At the end of March, the median home value in Australia rested at $704,723, with a capital city home buyer expected to pay $764,995 for a home, while this sum drops to $578,496 in regional Australia.
