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Recent industry data has indicated that a surge in stock level and weaker sales volumes over spring have tilted the balance in favour of buyers, leaving sellers with softer market conditions.
CoreLogic’s latest Monthly Housing Chart Pack has revealed that this year’s spring selling season has been less lucrative for sellers, with the estimated 133,000 sales over spring representing a 4 per cent decline in volume compared to the historic five-year average.
The company reported that sales volumes varied significantly across the regions, with volumes in Sydney registering 15.1 per cent lower than the historic average, while in Adelaide volumes were instead 15.8 per cent higher.
The report also showed that total listing volumes across the nation increased by 10.6 per cent over spring to be 2.3 per cent above levels seen this time last year, with CoreLogic noting that “even some of the tighter markets saw an uplift in stock”.
Notably, total listings in Perth increased by 34 per cent during the spring selling season, with the city’s volumes in the four weeks leading up to 1 December surpassing those of the same period last year by 1.2 per cent.
CoreLogic economist, Kaytlin Ezzy, commented that the “higher stock levels and lower-than-usual sales volumes” over the end of November showed that “buyers were the winners this spring”, while sellers instead “generally saw softer market conditions over the past few months”.
The market’s decline was also reflected in the falling combined clearance rate over spring, with the final weighted clearance rate for the four weeks to 24 November averaging 57.3 per cent, down from the 62.7 per cent recorded in the first four weeks of spring.
The report also observed that homes took longer to sell during spring, with the median days on market rising to 32 days in the three months to November, up from 28 days in the three months to August and 27 days in the spring of 2023.
Weighing in on these conditions, Ezzy noted that “the increase in selling times has coincided with higher stock levels, and softer sales volumes year-on-year”, and highlighted that “the median time on market increased by four days year-on-year across both the combined capital cities and regional market”.
Dwelling values stagnate
Despite the combined value of Australia’s residential real estate reaching $11.1 trillion by the end of November, CoreLogic said that national home values rose by just 0.5 per cent in the three months to November, slowing down significantly from the recent high of 2.2 per cent growth recorded in the three months to April.
The report also showed that home value growth remains concentrated at the more affordable end of the market, with values for the most affordable homes in Brisbane surging by 25 per cent. Adelaide recorded growth of 4.7 per cent in that quartile, while Perth’s most affordable properties increased in price by 4.5 per cent.
On the other end of the affordability spectrum, home values in the upper quartile markets of Darwin declined by 2.7 per cent over the last three months, alongside reductions of 1.6 per cent and 1.4 per cent in the upper quartile markets of Sydney and Melbourne, respectively.
Rental growth slows across the nation
In November, CoreLogic observed that national gross rent yields held steady at 3.7 per cent, marking two years of rent yields remaining at this level, despite significant variation being evident across the cities.
Over the last 12 months, rent yields were noted to have declined in high capital growth markets such as Brisbane, Adelaide and Perth, trended higher in Canberra, Darwin, Hobart and Melbourne, and remained steady in Sydney.
CoreLogic stated that national growth has continued to slow nationally, with the 5.3 per cent rental growth over the 12 months to November marking the slowest annual change since April 2021.
Nevertheless, rental growth was slightly more resilient in regional markets where rental values saw a 0.9 per cent lift over the three months to October, as opposed to growth of 0.2 per cent for capital city rents in the same period.
Ezzy remarked that the decline in rental growth could be linked to “slowing demand for rentals in the face of strained rental affordability”, which she said could potentially prompt the “formation of more share houses”, or make “young Australians reconsider a move out of the family home”.
“This is reinforced by RBA reporting on average household size, which has been rising across the capital cities,” she said.
The economist noted that the “gradual slowdown in net overseas migration could also be contributing to the stabilising in rent values”, and speculated that the backlog of work from the now closed HomeBuilder scheme may help to “take some demand out of the rental market”.
“Rental growth may rebound a little through the seasonally strong first quarter of 2025, but beyond any seasonality, it looks increasingly like the rental boom is over,” Ezzy said.
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