According to CoreLogic’s national Home Value Index (HVI), February continued the slow down in home value declines, following up January’s 1 per cent drop.
A bounce back in Sydney dwelling values was the main driver, with the NSW capital’s prices increasing 0.3 per cent, however, the loss of downwards momentum was broad-based.
Darwin (-0.3 per cent) was the only capital city to record a steeper monthly fall in February, albeit from relatively flat conditions previously. Every other capital city except Hobart (-1.4 per cent) saw housing values fall by less than half a per cent over the month.
CoreLogic’s research director, Tim Lawless, said the stabilisation in housing values over the month coincides with consistently low advertised supply levels and a rise in auction clearance rates.
“The past four weeks have seen the flow of new capital city listings tracking -17.0 per cent lower than a year ago and -11.9 per cent below the previous five-year average,” Mr Lawless said.
“This trend towards a below average flow of new listings has been evident since September last year, coinciding with a loss of momentum in the rate of value decline.”
Auction clearance rates also rebounded in February, with the capital city weighted average reaching the high 60 per cent range through the second half of the month. Sydney clearance rates rose to above 70 per cent in the week ending 19 February, the first time since February 2022.
“Considering the RBA’s move to a more hawkish stance at the February board meeting, along with an expectation for a weaker economic performance and a loosening in labour markets, there is a good chance this reprieve in the housing downturn could be short-lived,” Mr Lawless said.
“We also have the fixed-rate cliff ahead of us; arguably the full impact of the aggressive rate hiking cycle is yet to play out.”
It was the upper quartile of the combined capital city housing market that led the way, increasing 0.1 per cent in February. Lower value segments also stabilised, though were still down 0.1 per cent across the lower quartile and 0.3 per cent across the broad middle of the market.
The trend was most pronounced in Sydney, with the upper quartile rising 0.7 per cent while the lower quartile fell 0.2 per cent.
The top end of the market is where the losses have been most severe, falling 13.5 per cent in the last 12 months, versus a 1.7 per cent gain in the lower quartile. CoreLogic said this is in line with previous cycles, where the upper quartile tends to lead both the upswing and the downturn.
Regional dwelling values were down 0.3 per cent in February compared with a 0.1 per cent fall across the combined capital cities. However, the weaker relative result can mostly be attributed to the monthly rise in Sydney housing values rather than a larger fall in regional market values.
“Each of the broad rest-of-state regions, apart from NSW, recorded a monthly outcome that was inline or stronger relative to their capital city counterparts,” CoreLogic said.
Since peaking in June 2022, the combined regionals index is down 7.7 per cent, compared with a 9.7 per cent drop in the combined capital cities index, which peaked slightly earlier in April 2022.
