Australian Market Update – March 2022

Housing values increased 0.6% for the month of February according to CoreLogic’s nation Home Value Index (HVI), which marked the 17th consecutive increase in national HVI. Generally, housing values have increased, however the growth of 0.6% marks the lowest monthly rise since October 2020 and is 1.1% down from the previous month and a cyclical peak of 2.8% in March 2021.

Sydney and Melbourne have reported a decrease in value of -0.1% and 0.0% respectively, with Sydney posting its first decline since September 2020. Contrastingly, Brisbane, Adelaide and Hobart have shown a continued rate of growth where housing values rose more than 1% in February.

Brisbane values rose over 7.2% over the past three months to February, while Adelaide has increased 6.4% over the same period. On the other hand, Sydney increased 0.8% and Melbourne 0.2% over the last three months.

Nationally, the values in housing recorded 20.6% higher over the last 12 months, which is a decline from the figure recorded last month at 22.4%.

The trend for Regional Australia has continued, recording a substantially higher rate of growth than the capital cities. The housing values across rest-of-state regions increased to 5.7%, whereas the capital cities rose 1.8% for the past three months. This peak in the regional numbers have declined from a peak of 6.4% in the December quarter and down from a cyclical peak of 6.6% in April 2021.

Statistically speaking, the total number of properties advertised for sale over February period was 13.3% lower than in the same period in 2021, highlighting an ongoing shortage in supply of housing on  the market. Melbourne and Sydney have seen a return to more normal levels of stock, while other Australian capital cities are recording extremely low levels of inventory.

There is a trend of newly listed properties, which is highlighted by an increase of 11.3% over the same period in February 2021 and 1.7% above the previous five-year average. This has contributed to the increase of overall stock, combined with the softening in demand caused by worsening affordability.

A combination in the growth of housing values softening and with rental growth holding firm, the overall gross yield has now finally stabilised at 3.2% which is the lowest rate on record. Sydney at 2.4% and Melbourne at 2.8% have the lowest yield profiles as rental growth have increased over the growth in housing values.

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