Australia’s house-price growth momentum slows as property listings jump
AUSTRALIA’S house-price growth decelerated in July following an increase in property listings that suggest sellers are taking advantage of current market strength, including those struggling to meet their obligations after rapid interest-rate increases.
Prices across Australia’s capital cities advanced 0.8 per cent, a fifth straight monthly gain, albeit slower than June’s 1.2 per cent pace, data from property consultancy CoreLogic showed on Tuesday (Aug 1). Market bellwether Sydney rose 0.9 per cent while Melbourne grew at a more subdued 0.3 per cent.
July’s cooling was driven by the upper quartile of the market, which tends to lead the cycle and could be “a sign of a broader easing in the pace of growth over the coming months”, said Tim Lawless, research director at CoreLogic.
The figures come as the Reserve Bank of Australia (RBA) has raised its key rate to 4.1 per cent – the highest since April 2012 – hitting consumer sentiment. At the same time, Australia’s job market remains strong, with unemployment at an ultra-low 3.5 per cent.
The cooling in property-price momentum will be welcomed by the RBA ahead of its rate decision on Tuesday. Financial markets are betting that the cash rate will remain unchanged while economists see a 25 basis-point hike to 4.35 per cent.
The central bank has lifted borrowing costs by 4 percentage points since May 2022 and signalled a higher hurdle to raise further as it tries to bring down inflation and engineer a soft landing.
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Tuesday’s data showed the flow of new home listings in capital city markets rose almost 4 per cent over July, bucking a seasonal trend in which vendors traditionally put off sales during winter months.
“It may be the case that more homeowners are picking current market conditions as a good time to sell,” said Lawless.
“Another possibility is that we are seeing the first signs of motivated selling as the rapid rate-hiking cycle catches up with household balance sheets.”
Even so, the data indicated that the housing rebound which began earlier this year persists – over the three months to July, prices in Sydney surged 4.5 per cent for a median home value of A$1.08 million (S$965,812).
Strong population growth in Australia and a supply shortage has fuelled price gains despite higher borrowing costs.
“Overall, the housing market remains resilient to a double-dip downturn, with housing values continuing to trend higher across most regions of the country,” Lawless said. “The trend in advertised stock levels will be a key factor determining housing market outcomes.”
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