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CoreLogic’s national Home Value Index (HVI) has recorded a third consecutive monthly rise, with the pace of growth accelerating sharply to 1.2% in May. Sydney continues to lead the recovery trend, with home values rising by 1.8% over the month, and the rate of growth accelerating across every capital city. The positive trend in capital city home sales is a symptom of persistently low levels of available housing supply running up against rising housing demand. Buyers are becoming more competitive and there's an element of FOMO creeping into the market. The trend in regional housing values has also picked up, with the combined regionals index rising 0.8% in April, following 0.2% and 0.1% rises in March and April. The number of homes advertised for sale fell further in May, with total listings trending lower as buyer demand outstrips supply. Estimated home sales have shown some subtle upwards movement, with capital city dwelling sales outstripping new listings in the past three months. This disconnect between available supply and housing demand is a central factor placing renewed upwards pressure on housing values. With capital city home values up 2.8% in the past three months, it is clear the market has moved past a short but sharp downturn, but the outlook for housing remains highly uncertain given the possibility of further rate hikes, higher levels of mortgage stress and persistently low levels of consumer sentiment. The outlook for housing markets largely rests on the trajectory of interest rates, and the timing of a rate cut remains highly uncertain. |
