Australian housing markets are gathering strength as we head further into spring, with September marking the strongest monthly gain for national dwelling values since October 2023.
The Cotality Home Value Index (HVI) recorded a 0.8% increase in September, powered by robust growth conditions across the capital cities, where values rose 0.9% over the month.
On a quarterly basis, the national HVI increased 2.2%, up from a 1.5% lift in the June quarter and double the 1.1% increase seen over the three months to March. In dollar terms, the September quarter rise was equivalent to a $18,215 increase in the median dwelling value.
Growth has once again become broad-based, with every capital city and rest-of-state region recording an increase in dwelling values over the month, quarter and most recent 12-month period. That being said, some divergence in the pace of growth is once again emerging.
Perth and Brisbane are again pulling ahead of the larger capitals, with values up 4.0% and 3.5% respectively through the September quarter, with the pace of gains being led by the unit market. Darwin is showing an even stronger run of growth with values jumping 5.9% higher over the past three months.
Cotality's research director, Tim Lawless, notes that each of these cities continue to show a severe lack of advertised supply. "The number of homes for sale at the end of September was about 53% lower than average in Darwin, 45% below average in Perth and down 31% in Brisbane. At the same time, estimates for quarterly home sales are tracking above average, demonstrating a clear disconnect between demand and supply."
Century 21 Australasia Chairman and Owner, Charles Tarbey said, "As a country I think it might be time to stop concentrating so much on how much property prices are going up or whether a property crash is around the corner. The country might be better served by an honest and frank, national conversation about how we can create a more inclusive and efficient property market."
Advertised stock levels are below average across every capital city adding to the momentum in home value growth. Over the four weeks to September 28th, capital city listings tracked about 18% below the previous five-year average. Meanwhile, estimates of sales activity through the September quarter were 7.3% above the previous five-year average.
"While it's highly likely that prices are going to continue to grow – spurred on by immigration, new first homebuyer incentives, massive supply shortages and a low-interest rate environment -I feel our country might be better served focusing on creative solutions aimed at rebalancing supply and demand," said Charles Tarbey.
Mr Tarbey believes that while it's positive that governments are focused on getting young Australians into the property market, current thinking may be too focused on short term outcomes.
"The Australian Government's 5% Deposit Scheme is a positive announcement but at the same time I was hoping that governments would announce new policies aimed at unlocking major new supply while better incentivising developers and home builders. Until we see a massive and consistent influx of new land and properties, its going to be near impossible to meaningfully address housing affordability," said Charles Tarbey.
Mr Tarbey believes that the core of the problem remains supply and having the right incentives in place to encourage it.
"Governments have a clear role in identifying and unlocking new land. This should be done more aggressively. Perhaps they could look at models where developers and builders only pay for that land on competition of construction of a home, which has been fast tracked through council, and settled on with a buyer. This may make projects more feasible and faster to complete," said Charles Tarbey.
"I think many Australians would still be shocked by the amount of red, green and black tape that still hinders developers from building and selling new housing supply quickly. As much of that as possible should be quickly removed.
"On the first homebuyer side, perhaps we should look at a model that incentivises first homebuyers to buy in areas that they can afford while renting around the areas that they want to live. We could make their investments tax free for rental income and capital gains for up to three years," said Charles Tarbey.
"This could help create new supply in the market while giving first homebuyers exposure to the property market without them having to uproot their lives to buy in an area they are unfamiliar with or is a long way from their place of work. This could also take some of the risk out of the housing market as we know that many buyers are highly leveraged and will be very sensitive to interest rate rises in the future.
"History has shown us that there are solutions to almost all problems. We need to better understand the problems – not from consultants but from people at the coal face – and then draw on Australia's huge reserve of talented and creative people to come up with innovative solutions aimed at addressing the problems for the long term. The longer we leave these issues the worse they are likely going to get.
"A strong and efficient property market is in everyone's interest and it's the time to change the focus from rising prices to how we create a market that is efficient, sustainable and accessible," said Charles Tarbey.