The Australian housing market has seen a significant wealth boost in the Financial Year 2024 (FY24), with housing values increasing by 8.0% across the year. This is according to the latest Hedonic Home Value Index. Let’s delve into the key highlights from the report.
National Dwelling Values
Australian dwelling values increased by 0.7% in June, bringing the total growth for FY2023-24 to 8.0%. This translates to a $59,000 increase in the median dwelling value, which now stands at $794,000. This growth is in stark contrast to the previous financial year (FY2022-23), which saw a decline of -2.0% in the national index.
Trend Growth Rate
While the annual growth has been strong, the trend growth rate has eased since mid-2023. The most recent June quarter saw dwelling values rise by 1.8%, similar to the March quarter (1.9%) and December quarter of the previous year (1.8%).
Regional Variations
Most regions in Australia are trending higher in value, except for Melbourne and regional Victoria, where values declined by -0.2% and -0.3% respectively in June. Hobart also showed weaker conditions, although values remained relatively flat (+0.1%) in June. Regional Victoria experienced a decline in values over the June quarter (-0.3%) and the financial year (-0.1%).
Strong Capitals
Perth experienced strong conditions, with values surging by 2.0% in June and 23.6% over the year. Adelaide and Brisbane also saw significant increases in values, with 1.7% and 1.2% growth in June, respectively.
Regional Markets
Regional WA led the pace of capital gains, with a 1.5% rise in June and a 16.6% increase over the financial year. Regional SA and Regional Qld also recorded strong growth conditions. However, regional Victorian dwelling values fell by half a percent over the year, while regional Tasmania recorded a mild 0.7% rise.
Advertised Stock Levels
The strongest markets continue to face a severe shortage of homes available for sale. Perth, Adelaide, and Brisbane have significantly lower real estate listings compared to the previous year and the five-year average. Melbourne, on the other hand, has seen an increase in listings, currently 14% above the five-year average, while Hobart has consistently elevated listings, tracking 46% above average.
Home Sales
Nationally, the annual number of homes sold was 8.6% higher than the previous year and 4.8% above the previous five-year average. Perth experienced the largest jump in annual sales, with the number of homes sold last year being 29% above average levels.
Despite the presence of downside factors such as high rates, cost of living pressures, affordability challenges, and tight credit policies, the Australian housing market has shown remarkable resilience. This can be attributed to tight supply levels, which have kept upward pressure on values.
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