Property Market Update - April 2023

Overall Property Market Snapshot

The Australian property market continues to be the principal asset class of choice for Australians with 57.0% of household wealth held in housing at a total estimated value of $9.3 Trillion. This is greater than the combined value of Australian Superannuation, Australian Listed Stocks and Commercial Real Estate.

Market Snapshot
Source: CoreLogic - Monthly Housing Chart Pack (March 2023)

Furthermore, with outstanding mortgage debt at $2.2 Trillion, the Australian Residential Real Estate Market has a Loan to Value Ratio (LVR) of 23.7%. Contrary to many mainstream media headlines, the overall market's LVR is not what would be considered to be at critically dangerous levels.


Median Dwelling Values

According to CoreLogic, median dwelling values for the Australian property market in the 8 capital cities as of 31 March 2023 were as follows:

SydneyMelbourneBrisbaneAdelaidePerthHobartDarwinCanberra
$1 014 393$747 322$698 071$645 721$567 111$650 689$492 465$828 175
Source: CoreLogic - Hedonic Home Value Index (3 April 2023)

Whilst Sydney continues to have the highest median dwelling value, it is worth noting that despite having the 4th largest population of all the capital cities, Perth's median value ranks 7th overall. This is approximately 56% of the value of Sydney's median dwelling value, and a staggering $83 578 less than Hobart's median dwelling value which has approximately 10 times less the population of Perth.


Change in Dwelling Values

Source: CoreLogic - Hedonic Home Value Index (3 April 2023)

Past Month

Combined capitals (0.8% increase) outperformed combined regionals (0.2% increase) during March 2023. The Sydney (1.4%) and Melbourne (0.6%) markets led the way. In the regional market, the Regional South Australian (1.0%) and Regional Western Australian (0.9%) markets were the only ones to record increases in dwelling values.

Past 3 Months

Combined capitals (0.4% decrease) outperformed combined regionals (1.0% decrease) during the past 3 months to April 2023. The Regional South Australian (2.0%) and Regional Western Australian (1.5%) property markets were the top performers. In the capital city market, Sydney (0.4%) and Perth (0.1%) outperformed their peers, whilst Hobart (-4.0%) and Canberra (-2.0%) both experienced a reduction in dwelling values over the quarter.

Past 12 Months

Combined regionals (5.7% decrease) outperformed combined capitals (8.7% decrease) during the past 12 months to April 2023. The Regional South Australian (11.3%) and Regional Western Australian (4.9%) property markets recorded the highest levels of growth. In the capital city market, Adelaide (3.0%) and Perth (1.9%) were the standouts, whilst Hobart (-12.9%) and Sydney (-12.1%) experienced the largest decreases in dwelling values over the past year.


Market Changes in Rents

Market Changes in Rent - Houses
Source: CoreLogic - Hedonic Home Value Index (3 April 2023)

Houses

The Perth housing rental market continues to charge ahead with a 12.7% growth in rents over the past year. Adelaide (11.2%) and Brisbane (11.2%) have also experienced substantial growth in rents for houses over the preceding 12 months.

The Canberra housing rental market has turned negative (-0.8%) over the previous 12 months. Darwin (2.6%) and Hobart (4.0%) are at the lower end of rental growth.

Units

The Sydney unit rental market has outperformed all other capital cities, experiencing a 18.1% growth in rents over the past year. Continued pressure is currently being placed on this market from record levels of post-pandemic immigration. Brisbane (16.1%) and Melbourne (14.6%) have also seen substantial growth in rents for units over the preceding 12 months.

Similarly to housing rents, Canberra has experienced more moderate growth of 3.2% in unit rents over the previous 12 months. Darwin (7.3%) and Hobart (7.8%) have continued their annual increase, roughly in line with the economy's broader level of inflation.

Market Changes in Rent - Units
Source: CoreLogic - Hedonic Home Value Index (3 April 2023)

Gross Rental Yields

Gross Rental Yields
Source: CoreLogic - Hedonic Home Value Index (3 April 2023)

Combined Property Markets

Combined regional yields (4.6%) continue to be higher than combined capital gross yields (3.7%).

Regional Property Markets

Regional Northern Territory (6.8%) and Regional Western Australia (6.4%) collectively have the highest gross rental yields, whilst Regional Victoria (3.9%) and Regional New South Wales (4.1%) have the lowest yields.

Capital City Property Markets

Amongst the capital cities, Darwin (6.4%) and Perth (4.9%) continue to offer the best opportunities for investors to purchase positive to neutrally geared property. On the opposite end of the spectrum, Sydney (3.2%) and Melbourne (3.4%) continue to offer the lowest gross rental yields.


Find the full version of the National Media Release by CoreLogic here.


You can find the Property Market Update for March 2023 here.


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