The Australian housing market is showing signs of slowing down, which is good news for potential home buyers. According to property data firm CoreLogic, the national home value index saw a modest 0.3 percent increase, with decreases in four capital cities. This includes Sydney, which experienced a decline for the first time in nearly two years, along with Canberra, Darwin, and Melbourne.
CoreLogic’s research director, Tim Lawless, noted that Sydney may follow a similar path to Melbourne, which has been in a slight correction due to increased listing numbers. The affordability ceiling for buyers has also contributed to the slowdown in price growth in Sydney, which saw significant growth post-pandemic.
Other high-performing cities like Adelaide, Perth, and Brisbane are also losing momentum, with smaller monthly gains compared to previous months. Despite the possibility of a negative trend in the national index, Lawless believes that potential interest rate cuts in early 2025 will help stabilize prices.
The strong labor market and limited new housing supply outlook are expected to continue supporting property values. Economists like Micaela Fuchila from Jarden believe that a slower pace of home price growth would be welcomed by the Reserve Bank of Australia (RBA) as they monitor the economy.
In terms of rental market growth, CoreLogic reported a slowdown in annual rental growth rates, which could have a positive impact on inflation. Property investors have been driving mortgage activity, with investor loans increasing by 29.5 percent over the year.
However, lending by investors decreased on a monthly basis for the first time since February. Owner-occupier lending remained steady, while first home buyer loans saw a slight decrease.
