Australian home values increased by 1.0% in November, though Melbourne and Sydney’s growth lagged other capital cities.
This is a slight decline from October's 1.1% growth, according to Cotality’s Home Value Index report. Melbourne values were up 0.3% and Sydney values rose by 0.5%, while all other capitals saw growth of at least 1%.
“The skew towards the mid-sized capitals is especially evident in Perth, where listings are holding more than 40% below average, buyer demand is elevated, and the 2.4% monthly rise in dwelling values has added just over $21,000 to the median in November, roughly $5,000/week,” said Cotality research director Tim Lawless.
Sydney and Brisbane had the highest median housing values of any capital city, at A$1.27 million and $1.02 million, respectively.
Brisbane, Adelaide, and Darwin saw the second-highest monthly value growth after Perth, all at 1.9% in November.
Regional housing values increased by 1.1% in November, and the median housing value across nationwide regional areas was $723,107. Regional Western Australia led gains at 1.7%, while regional Victoria’s growth was the lowest at 0.8%.
Housing unaffordability has remained high, which could weigh on housing value growth, according to Cotality. The cost of servicing a new loan is at 45% of the median household income, it found last month.
Inflation also increased by a higher-than-expected 3.8% in October. “With inflation once again above the RBA’s target range and rates potentially on hold for the foreseeable future, it's likely housing sentiment will suffer,” said Lawless.
Rents are rising, with Cotality’s national rental index up half a percentage point to 5.0% last month. Housing value growth is outpacing rent increases; however, the national gross rental yield is dropping to a three-year low of 3.58%.
Rental vacancies are at 1.5%, nearing record lows and falling from 1.9% last November.
