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  • May sees biggest monthly property price lift of 2024

May sees biggest monthly property price lift of 2024

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With inflation proving sticky, there have been questions around whether Australian property might see a drop in momentum. 

Instead, CoreLogic's latest report shows that activity has picked up with May delivering the largest monthly growth of the year so far. 

Find out if the market will continue to climb or if interest rate uncertainty could bring another shift of gears.

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National property prices: May 2024

The median Australian home price rose +0.8 per cent in May, the most substantial national increase seen since October 2023.

That brings the country's overall year-to-date gains to +3.0 per cent.

MarketMonthQuarterAnnualMedian value
Combined capitals0.8%1.9%8.8%$864,780
Combined regional0.6%2.0%6.8%$626,888

Sydney got a surprising lift of +0.6 per cent for the month and returned to an all-time high after an extended period of suppressed growth, while Melbourne continued to hold around flat levels. 

Brisbane's +1.4 per cent upswing elevated the Queensland capital to Australia's second most expensive city for the first time this century with a median price above $840,000.

Perth and Adelaide also maintained their extraordinary runs with increases of +2.0 per cent and +1.8 per cent respectively. 

The smaller capitals of Hobart, Darwin and Canberra are still see-sawing from month to month, with Canberra being the only one of the three to see positive movement in May. 

Regional markets again closely reflected their capital city counterparts as WA, SA and Queensland outperformed. 

CoreLogic's research director, Tim Lawless, noted that Australia's strongest markets were being driven by extremely tight supply. 

"The number of properties available for sale in Perth and Adelaide remain more than -40 per cent below the five-year average for this time of the year while Brisbane listings are -34 per cent below average,” he said.

“Inventory levels in these markets remain well below average despite vendor activity lifting relative to this time last year. Fresh listings are being absorbed rapidly by market demand, keeping stock levels low and upward pressure on prices."

Three key takeaways from the current market

A number of 2024 property trends have become more firmly entrenched as the year has unfolded. Here are the headline issues worth tracking. 

Affordability remains the top drawcard

As has been the case throughout 2024 so far, the more affordable end of the market is outpacing more expensive homes in every city but Darwin. 

Across the capitals, the lower quartile of the market (ie. the most affordable 25 per cent of properties sold) has seen annual growth of +13.4 per cent compared to +6.7 per cent for the upper quartile. 

Mr Lawless explained that "After recording a higher rate of gain through the early months of the growth cycle, conditions have faded across the upper quartile as borrowing capacity reduced and affordability constraints deflected demand towards middle-and-lower-priced properties."

With home prices sitting at record highs for the majority of Australia's markets, it's likely this trend will continue, at least until there is some relief on the interest rates front. 

Low supply is trumping high interest rates

For much of 2024, new listings across the country have been coming onto the market at or above the five-year average rate, suggesting sellers are acting with confidence, particularly over April and May.

But total available listings remain a full -18.2 per cent below the five-year average, meaning buyers are readily absorbing new stock coming to market. 

The widespread shortage of available stock is still a key driver of price growth at a time when high interest rates should otherwise be putting downward pressure on home values. 

Total listings are lowest in Australia's fastest-growing markets: total stock in Perth, for example, sits -24.9 per cent below May 2023 as buyers scramble to pick up whatever they can. 

The hierarchy between cities is shifting

Brisbane's rise above Melbourne and Canberra to become Australia's second-most expensive market embodies the widening gap between how different cities and regions have performed over the past 12 months. 

Where the 2021 boom saw all markets more-or-less rise in unison, we're now seeing more fractured activity across the country as each state responds differently to factors like interest rates, population growth, undersupply and poor affordability. 

Sydney remains firmly in the top spot and is still seeing monthly growth but changing behaviours post-pandemic have seen substantial levels of interstate migration as Australians seek out more lifestyle-focused areas (like South East Queensland) or markets perceived to have better bang-for-buck (like Perth and Adelaide). 

What's next for Australian property? 

The future of interest rates remains an important factor to watch in the coming months, but it's not the only thing driving market performance. 

As Mr Lawless put it, "To say the housing market has been resilient is an understatement. Housing values are continuing to rise across most areas and housing types, with growth accelerating in some markets. 

"The common denominator remains a mismatch between housing supply and housing demand.”

Overall, the downside pressures of high interest rates and sticky inflation are being overpowered by the wider undersupply of housing in the face of strong demand. 

"Despite worsening affordability pressures, from both a purchasing and a rental perspective, Australian residents still need to keep a roof over their heads," he said. 

It's unlikely that supply will increase to the point of meeting demand for some time. New developments in the pipeline are well below the decade average for both units and houses as the high cost of materials and labour remain a significant problem for the construction industry. 

CoreLogic's report suggests that supply and demand will "eventually converge" but, in the meantime, "we can probably expect further upwards pressure on housing values."