Property Update - February 2023

Monthly highlights
 

• The combined value of residential real estate in Australia fell to $9.2 trillion at the end of January, from $9.3 trillion in the previous month.
  
  
• Dwelling values in Australia are -3.2% over the past 12 months, marking the largest annual decline in home values since May 2019.
  
  
• January saw national home values decline -1.0%, which is less than the -1.1% fall in December, and below the peak monthly decline (-1.6%) recorded in August.
  
  
• The highest annual growth rate in dwelling values among the regional and capital city dwelling markets was across Regional SA, at 15.3%. The lowest change in values was across Sydney, where home values declined -13.8% in the past year.
  
  
• Sales volumes continue to trend lower as buyer demand slows. CoreLogic estimates that in the 12 months to January, there were 500,550 sales nationally, down -19.1% compared to the previous year. While down compared to last year’s volumes, sales estimates are still 4.6% above the decade average annual sales volume.
  
  
• At the national level, properties are taking longer to sell. In the three months to January, the median days on market was 37, up from a low of 20 days in the three months to November 2021.
  
  
• Similarly, vendor discounting has also expanded from -2.9% in the three months to November 2021. In the three months to January 2023, the median vendor discount at the national level was -4.3%.
  
  
• In the four weeks to 8 January 2023, the volume of new listings totalled 13,936 nationally. The new listings trend is moving through a seasonal low, and is also -22.1% lower than the previous five-year average.
  
  
• The combined capital cities clearance rate was 61.8% for the week ending 29th of January. While this was a much stronger result than in the final weeks of 2022, the volume of auctions was still moving through a seasonal low. As volumes rise in the coming weeks, this will prove a more substantial test of the strength of the auction market.
  
  
• Annual growth in rent values eased slightly in January, to 10.1%. Annual growth in Australian rent values recently peaked over the 12 months to December, at 10.2%. The unusually high growth in annual rent growth has partially been driven by growth in unit rents across Sydney, Melbourne and Brisbane, where rents have increased around 14-16% annually.
  
  
• Through January 2023, Australian gross rent yields rose to 3.9%, up from a recent low of 3.21% a year earlier. This is the highest rent yield since November 2019.
  
  
• The chart of the month shows how much values would need to decline to get back to where they were at March 2020. National home values would need to decline a further 13% to reach March 2020 levels. 
   

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