August saw the 19th consecutive month of growth for Australian home values, edging up 0.5%. But the market is clearly slowing, with quarterly growth less than half that of a year ago.

While demand still outstrips supply, the gap is narrowing. Capital cities are diverging, with Perth, Adelaide, and Brisbane posting solid gains, while Sydney experienced modest growth and some cities saw values decline.

Affordability constraints, particularly in the face of high interest rates and living costs, are a major factor behind the slowdown. Cheaper markets are outperforming, with units doing better than houses in several cities.

Melbourne’s median dwelling value has been overtaken by Adelaide and Perth, a reflection of Melbourne’s weaker market and its higher proportion of units.

Rent growth is also slowing, with the national index unchanged for the second consecutive month. This is likely due to a combination of decreased demand from overseas migration and increased supply from investors.

Overall, while growth is moderating, the housing market remains resilient, supported by a lack of new supply. Spring sellers should be aware of local market conditions before listing.

This blog post was adapted from the CoreLogic article "Growth cools in Australian housing values through winter as Melbourne median slips below Perth and Adelaide," written by Eliza Owen, Head of Residential Research Australia (2nd Sept 2024)