Property Market Update - August 2023

Overall Property Market Snapshot

The Australian property market continues to be the principal asset class of choice for Australians with 56.1% of household wealth held in housing at a total estimated value of $9.6 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 (July 2023)

Furthermore, with outstanding mortgage debt at $2.2 Trillion, the Australian Residential Real Estate Market has a Loan to Value Ratio (LVR) of 22.9%.


Median Dwelling Values

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

SydneyMelbourneBrisbaneAdelaidePerthHobartDarwinCanberra
$1 082 129$766 912$735 394$671 755$598 074$655 984$488 363$839 507
Source: CoreLogic - Hedonic Home Value Index (1 August 2023)

Whilst Sydney continues to have the highest median dwelling value, it is worth noting that despite having the 4th largest population of all capital cities, Perth's median value ranks 7th overall. This is approximately 55% of the value of Sydney's median dwelling value, and $57 910 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 (1 August 2023)

Past Month

Combined capitals (0.8% increase) outperformed combined regionals (0.2% increase) during July 2023. The Adelaide (1.4%) and Brisbane (1.4%) markets led the way. In the regional market, The Regional South Australian (1.1%) and Regional Queensland (0.7%) markets recorded the largest increase in dwelling values.

Past 3 Months

Combined capitals (3.5% increase) outperformed combined regionals (1.2% increase) during the past 3 months to August 2023. Sydney (4.5%) and Brisbane (4.2%) outperformed their peers. In the regional market, the Regional South Australian (3.1%) and Regional Queensland (2.6%) property markets were the top performers.

Past 12 Months

Combined capitals (2.7% decrease) outperformed combined regionals (5.6% decrease) during the past 12 months to August 2023. Perth (3.4%) and Adelaide (1.0%) were the standouts, whilst Hobart (-11.4%) and Canberra (-7.9%) experienced the largest decreases in dwelling values over the past year. In the regional market, the Regional South Australian (8.8%) and Regional Western Australian (3.3%) property markets recorded the highest levels of growth.


Market Changes in Rents

Market Changes in Rent - Houses
Source: CoreLogic - Hedonic Home Value Index (1 August 2023)

Houses

The Perth housing rental market continues to charge ahead with a 13.2% growth in rents over the past year. Melbourne (11.2%) and Sydney (9.1%) have also experienced substantial growth in rents for houses over the preceding 12 months.

The Canberra market remains negative (-4.0%) over the past 12 months. Hobart (0.2%) and Darwin (1.8%) are at the lower end of rental growth.

Units

The Sydney unit rental market has outperformed all other capital cities, experiencing a 17.8% growth in rents over the past year. Continued pressure is currently being placed on this market from an undersupply of dwellings and record levels of post-pandemic immigration. Perth (15.9%) and Brisbane (15.8%) have also seen substantial growth in rents for units over the preceding 12 months.

Similarly to housing rents, Canberra has experienced negative growth of -0.5% in unit rents over the previous 12 months. Hobart (2.8%) and Darwin (4.7%) have continued their annual increase, below the economy's broader level of inflation.

Market Changes in Rent - Units
Source: CoreLogic - Hedonic Home Value Index (1 August 2023)

Gross Rental Yields

Gross Rental Yields
Source: CoreLogic - Hedonic Home Value Index (1 August 2023)

Combined Property Markets

Combined regional yields (4.5%) continue to be higher than combined capital gross yields (3.6%).

Regional Property Markets

Regional Northern Territory (6.9%) and Regional Western Australia (6.6%) collectively have the highest gross rental yields, whilst Regional Victoria (4.0%) and Regional New South Wales (4.1%) have the lowest yields.

Capital City Property Markets

Amongst the capital cities, Darwin (6.5%) 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 (3.1%) and Melbourne (3.5%) 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 July 2023 here.


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