Opportunities Amid Falling Home Values
National Month-on-Month Change in Dwelling Values: The chart highlights key economic and policy events from 2013 to 2023
Australian home values have nosedived for the first time since February 2023, marking a pivotal moment in the real estate industry. Following two years of robust growth, there are now different opportunities and challenges facing borrowers and investors. According to CoreLogic’s Home Value Index (HVI) for December, national home prices fell by just 0.1%, but there is more to this indicator than meets the eye.
A Closer Look at the Market
The year started with a bang in 2024 as home values rose by 4.1% during the first semester. However, things slowed down dramatically towards the end, recording only a 0.7% increment. The average gain per house was approximately $38,000, translating into a national median home value increase of 4.9%. Nevertheless, regional differences may present varying images.
This has been one city that underwent an annual decrease of three percent where demand has been falling.
Decoding the Numbers: National and Regional Trends
Nevertheless, national median house prices rose by an average of $38,000 per unit sold or a rise of 4.9%. However, despite this appreciation, there was significant regional variation.
In Melbourne, they are at around 3% annually showing demand has fallen within the city.
Hobart and ACT had small drops in values of -0.6% and -0.4% respectively.
Perth (19.1%), Adelaide (13.1%), and Brisbane (11.2%), among others, reported double-digit annual growth rates.
Sydney stays most costly at $1191955 which is followed by moderate gains of 2.3%.
Adelaide Versus Perth
There was a 2.1% increase in the value of Adelaide residential properties in the last quarter of 2024, slightly higher than the 1.9% for Perth (CBRE Research, 2015). This rise was supported by an undersupply of dwellings in Adelaide which caused inventory levels to be about 34% below the year average and prices to go up due to high demand.
On the other hand, there is a greater availability of housing in Perth making it more affordable but slowing price growth. Thus, discerning buyers should know these contrasts before they arrive at any buying decision.
Challenges and Smart Strategies
Borrowers can face challenges and also opportunities in a transforming property market. Falling home values in certain cities (for example, in Melbourne) may affect people’s home equity through rapid growth in other areas such as Adelaide and Brisbane, which may threaten affordability and access.
The remaining investment should be long-term in promising areas with robust growth potential for greater return.
The real estate market seems to be everywhere and with appropriate guidance, fortunately, these transitions turn into an opportunity.
ASK Financials provides an individualized strategy to help you make an informed decision, putting you in a position to secure your future financially.
Call now for a consultation to learn more about the best loans and investment strategies available for you! Book a free chat at ASK Financials.
