Property Market Update - June 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 $9.5 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 (May 2023)

Furthermore, with outstanding mortgage debt at $2.2 Trillion, the Australian Residential Real Estate Market has a Loan to Value Ratio (LVR) of 23.2%.


Median Dwelling Values

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

SydneyMelbourneBrisbaneAdelaidePerthHobartDarwinCanberra
$1 052 810$755 871$713 939$654 767$580 023$655 403$491 386$825 053
Source: CoreLogic - Hedonic Home Value Index (1 June 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 a staggering $75 380 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 June 2023)

Past Month

Combined capitals (1.4% increase) outperformed combined regionals (0.5% increase) during May 2023. The Sydney (1.8%) and Brisbane (1.4%) markets led the way. In the regional market, the Regional South Australian (0.9%) and Regional Queensland (0.8%) markets recorded the largest increases in dwelling values.

Past 3 Months

Combined capitals (2.8% increase) outperformed combined regionals (0.8% increase) during the past 3 months to June 2023. The Regional South Australian (2.8%) and Regional Queensland (1.9%) property markets were the top performers. In the capital city market, Sydney (4.5%) and Perth (2.4%) outperformed their peers, whilst Darwin (-1.3%) and Hobart (-0.5%) both experienced a reduction in dwelling values over the quarter.

Past 12 Months

Combined capitals (6.8% decrease) outperformed combined regionals (6.9% decrease) during the past 12 months to June 2023. The Regional South Australian (9.5%) and Regional Western Australian (3.6%) property markets recorded the highest levels of growth. In the capital city market, Perth (2.0%) and Adelaide (0.4%) were the standouts, whilst Hobart (-12.6%) and Brisbane (9.3%) 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 (1 June 2023)

Houses

The Perth housing rental market continues to charge ahead with a 13.0% growth in rents over the past year. Melbourne (10.0%) and Adelaide (9.7%) have also experienced substantial growth in rents for houses over the preceding 12 months.

The Canberra market has turned negative (-3.2%) over the past 12 months. Hobart (1.5%) and Darwin (3.0%) are at the lower end of rental growth.

Units

The Sydney unit rental market has outperformed all other capital cities, experiencing a 19.3% 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. Brisbane (16.4%) and Melbourne (15.6%) 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 1.5% in unit rents over the previous 12 months. Darwin (5.8%) and Hobart (6.1%) 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 (1 June 2023)

Gross Rental Yields

Gross Rental Yields
Source: CoreLogic - Hedonic Home Value Index (1 June 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 (6.6%) and Regional Western Australia (6.4%) 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 (6.4%) 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 (3.5%) 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 May 2023 here.


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