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Home prices continued their upward trajectory in August, with expectations the spring selling season will start with a bang.
National home values rose for the sixth consecutive month, up by 0.8 per cent in August according to CoreLogic’s latest Home Value Index (HVI) as the typically busy spring selling season kicks off.
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CoreLogic’s HVI has risen 4.9 per cent since bottoming out in February, with $34,301 being added to the median dwelling value.
The gain in August was a slight acceleration from the 0.7 per cent recorded in July, ceasing the two-month trend of slowing value gains in the capitals, according to CoreLogic.
The HVI showed a rise in dwelling values in every capital city except for Hobart, which saw a drop of 0.1 per cent.
Brisbane led the rise in values this month, up 1.5 per cent, followed by Sydney and Adelaide tied at 1.1 per cent, Perth at 0.9 per cent, Darwin at 0.8 per cent, Melbourne at 0.5 per cent, and Canberra at 0.3 per cent.
Commonwealth Bank of Australia (CBA) senior economist Belinda Allen said the pace of price gains have exceeded the major bank's expectations.
"In May; we forecast national home prices to rise by 3 per cent in 2023 and a further 5 per cent in 2024.
"The May forecast has already been met this year. Gains in calendar 2023 to August sit at 4.7 per cent.
"Given the current momentum in the market we revised up our estimate for home prices gains in 2023 to 7 per cent last week. We still expect a 5 per cent gain in 2024," Ms Allen added.
Furthermore, AMP Bank chief economist Shane Oliver stated: "The rebound in prices since February reflects a surge in underlying demand on the back of high immigration and constrained supply dominating the negative impact of higher interest rates."
"Our base case is that property prices have seen the low for this cycle and will rise around 5 per cent next year as interest rates start to fall."
Research director at CoreLogic, Tim Lawless, noted the diverse trend in housing values, albeit generally positive.
“Sydney has led the recovery trend to-date with a gain of 8.8 per cent since values found a floor in January this year. Brisbane has also posted a strong recovery with values up 6.2 per cent since bottoming out in February,” Mr Lawless added.
“At the other end of the scale, some other capital cities are better described as flat, with Hobart home values unchanged since stabilising in April, while values across the ACT have risen only mildly, up 1.0 per cent since a trough in April.”
Meanwhile, PropTrack’s Home Price Index gas also recorded a rise in national home prices, up 0.28 per cent in August.
According to the index, national prices are now 2.64 per cent higher than this time last year and up 3.51 per cent so far in 2023.
Excluding Darwin, which saw prices fall 0.38 per cent, all capitals saw gains in August, led by Adelaide at 0.64 per cent, followed by Sydney (0.47 per cent), Perth (0.31 per cent), Hobart and Brisbane (tied at 0.27 per cent), Melbourne (0.15 per cent), and ACT (0.14 per cent).
Once again, Sydney is leading the overall recovery, with prices up 6.19 per cent from their November 2022 trough and 1.29 per cent below the February 2022 peak.
PropTrack senior economist Eleanor Creagh said: “August marked the eighth consecutive month of national home price growth.
“This is the longest period of consecutive monthly growth since the pandemic boom when prices rose for 23 months straight between May 2020 and March 2022.”
Ms Creagh added that national home prices have regained the majority of price falls seen last year, as strong housing demand with a limited flow of new listings hitting the market offset the impact of interest rate hikes.
The price increases come as the spring selling season starts, with CoreLogic's auction market preview for the week ending 3 September 2023 showing that 2,401 capital city homes are expected to go under the hammer this weekend, up 5.4 per cent from the previous week (2,278). This would make it the third-busiest auction week over the year to date.
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