CoreLogic & Proptrack says property market now is a buyer’s market

New home value and price data from two major real estate analytics firms clearly show balance in the property market is shifting in favour of buyers, but possibly only for a limited time.

The clear take-out from the latest monthly property value figures from CoreLogic and home price data from PropTrack is that if you are planning to buy a property, NOW is the time to be active in the market, with plenty of stock available for purchase and vendors willing to negotiate on price.

An expected cut in interest rate cuts in the next few months, coupled with increased borrowing capacity and more confidence about economic conditions, could soon see many more potential buyers enter the market - a scenario that would see price growth accelerate again.

CoreLogic’s Home Value Index

CoreLogic

CoreLogic says its national Home Value Index rose 0.4% in September, broadly in line with the monthly lift of 0.3% seen in July and August.

While the median home value has risen 6.7% over the past year to a new high of $807,110, the firm says the cumulative 1.0% in the last three months was the lowest rise seen over a rolling three-month period since March 2023.

The national numbers also don’t reflect significant diversity in markets, with CoreLogic recording four capital cities experiencing a fall in dwelling values through the September quarter, led by Melbourne, where values were down 1.1% (-0.1% in September).

Canberra (-0.9%), Hobart (-0.8%) and Darwin (-0.7%) also recorded declines over the quarter.

Home values in Sydney have continued to rise (0.2% in September); however, CoreLogic notes that the total 0.5% increase in the July, August, and September quarters was the lowest growth result since the three months ending in February 2023.

“The mid-sized capitals, which have led the pace of capital gains through most of the upswing, are also losing momentum, although growth continues to significantly outpace other capitals,” CoreLogic’s latest report says.

“Perth values were up 4.7% through Q3, easing from 6.2% in the June quarter.”

“The quarterly gains in Adelaide look to be topping out with a 4.0% rise through the quarter, and Brisbane’s quarterly growth has eased back to 2.7%, the lowest rise over a rolling three-month period since April last year.”

CoreLogic says this slowdown in the pace of home value growth across the nation comes as homeowners increasingly look to sell.

“The flow of freshly advertised housing stock hasn’t been this high at this time of the year since 2021,” says CoreLogic’s Research Director, Tim Lawless.

Mr Lawless also points to weaker selling conditions, with auction clearance rates falling to the low 60% range and homes sold by private treaty staying on the market longer.

CoreLogic’s report says the outlook “is for further growth in housing values, but a continuation in the gradual loss of momentum and increasing diversity across the cities and regions.”

However, Tim Lawless points to plenty of “upside factors”, which include “improving sentiment amid a slowdown in inflation, tight labour markets and a consensus that the next move in interest rates will be a cut.”

“A cut to interest rates is looking likely either early next year or even late this year, which will provide a boost to borrowing capacity and should help to support a further lift in confidence to make high-commitment decisions like buying a home,” he says.

PropTrack’s Home Price Index

Rival data house PropTrack says its measure of national home prices recorded a small 0.04% uptick in September to see 5.67% price growth over the last 12 months.

According to PropTrack, among the capital cities, only Melbourne (-0.30%) and Hobart (-0.31%) recorded price falls in September, with Sydney just in positive territory at 0.01%.

“The upswing in Australia’s home prices has persisted into the Spring selling season, though growth has slowed with buyers enjoying more choice,” says PropTrack Senior Economist Eleanor Creagh.

“The number of homes listed for sale has lifted, providing more choice and slowing price growth.”

“However, the pace of growth remains varied, with differing supply and demand conditions driving diverse performance across the country.”

“Buyers now have more properties to choose from, though uncertainty around the timing of interest rate cuts is likely also having an impact on the pace of growth.”

“Ahead, prices are expected to lift through the typically busier Spring selling season, albeit at a slower pace.”

While Melbourne, Hobart and parts of regional Australia have seen easing prices recently, it’s worth noting that since March 2020, all 15 of the Australian property markets PropTrack measures have grown.

The worst performer has been the Rest of NT (10.1%), while Perth has starred with 78.2% price growth.

The take-out

The clear message from these two different ways of measuring the real estate market is that overall, price and value growth is continuing for Australian residential property, although it is slowing as more vendors put their homes on the market.

Many analysts believe that after a period of strong price uplift, fuelled by strong population growth and a lack of new real estate listings, the pendulum has swung, and we are now in a “buyer’s market.”

SQM Research Managing Director Louis Christopher recently declared that the current market offered a (possibly short) window of opportunity for buyers, particularly in the large eastern capitals.

“Sydney and Melbourne have swung to a slight buyer’s market,” he told the Australian Financial Review.

“Sellers are having to become more negotiable, and buyers will look at this as a nice window until we see a cut in interest rates.”

But he also warned that a rate cut (which could come as early as December, according to some pundits) would revive competition in the market and lead to a reacceleration of prices.

“We are quite confident the market will bounce once we see the first interest rate cut,” he told the AFR.