Australia’s housing market is no longer galloping at full tilt in welcome news for home buyers.
Property data firm CoreLogic recorded a 0.3 percent lift in the national home value index, the same result as the three months prior but with falls recorded across four capital cities.
Sydney joined that list for the first time in nearly two years, alongside Canberra, Darwin, and Melbourne.
CoreLogic’s research director Tim Lawless said Sydney would likely follow a similar trajectory to Melbourne, which has been in a shallow correction as listing numbers have improved.
“Total listings are now 13.2 percent above the previous five-year average in Sydney and 13 percent higher in Melbourne,” he said.
Buyers hitting an affordability ceiling was also weighing on price growth, with Sydney experiencing a “spectacular growth phase” since the pandemic, he told AAP.
Even Adelaide, Perth, and Brisbane—which have been consistently high performers, and helped push the national index higher in September—were losing momentum.
Adelaide’s 1.1 percent gain was the lowest monthly rise since June.
Brisbane’s 0.7 percent lift was the weakest improvement since July.
A dip into the negative across the nationwide index was possible but Lawless said the prospect of interest rate cuts in early-2025 should keep a floor under prices.
The strong labour market and subdued outlook for new housing supply would further support property values.
Jarden chief economist Micaela Fuchila said a slower pace of growth in home prices would be welcomed by a central bank looking for evidence of a slowing economy.
The Reserve Bank of Australia (RBA) board is broadly expected to leave interest rates on hold at its meeting on Nov. 5, with underlying price pressures and a strong labour market cited as reasons to exercise caution despite headline inflation falling back within target.
Fuchila also highlighted a slowing pace of annual market rental growth as tracked by CoreLogic, with the 5.8 percent gain the smallest annual rise since April 2021.
She said this was a positive for inflation as rent accounts for over six percent of the basket of goods and services tracked by the Australian Bureau of Statistics in the consumer price index.
With the market still relatively tight and keeping upwards pressure on rental yields, property investors have been leading the upswing in mortgage activity.
Investor loans were up 29.5 percent over the year, Nov. 1’s update from the Australian Bureau of Statistics shows.
But for the first time since February, lending by investors fell on a monthly basis, dipping one percent to $11.57 billion (US$7.6 billion).
Owner-occupier lending held steady at $18.64 billion (US$12.2 billion), with first home buyer loans down 3.3 percent, to $5.2 billion (US$3.4 billion).
