Tim Lawless, Executive, Research Director, Asia-Pacific CoreLogic Australia, has shared the Home Value Index (HVI) report for January 2023.

HVI recorded its lowest fall in property prices since June 2022. The national HVI average recorded was -1.0% for January 2023.

What was the monthly change for each capital city and region?

• Sydney - 1.2% Regional NSW - 1.0%

• Melbourne - 1.1% Regional VIC - 0.7%

• Brisbane -1.4% Regional QLD -0.8%

• Adelaide -0.8% Regional SA +0.5

• Perth -0.3% Regional WA +0.4%

• Hobart -1.7% Regional TAS -1.1%

• Darwin - 0.1%

• Canberra -1.0%

Housing affordability and the Covid Pandemic have accelerated the migrational shift from the cities to regional areas. The data in the regional markets remain steady. WA and SA HVI data is still positive due to affordability as employers accept the covid working-from-home movement.

What are the changes in stock levels compared to January 2022 and the five year average?

The most significant decline for the three-month rolling average was seen across the three eastern major capital cities, with Brisbane down -4,8%, followed by Sydney -3.9%, Melbourne - 3.1%, Adelaide losing only -1.5% and Perth stable on -0.1%. All cities across Australia are still well above the pre-pandemic levels. The above graph shows the slowing of the decline, mainly buoyed by the low stock levels for both units and houses across the combined capital cities. See the graph below.

Vendors are not motivated to sell in a buyer’s market, with interest rates predicted to rise again between now and June 2023. The above top left land graph shows the new listings for the four weeks of January being -22.2% 2022 stock levels and 24.5% below the five-year average. The Above top right graph recorded only 70,792 active listings on the Australian Property Market in January, which is -5.6% below the same time last year and -24% below the five-year average. The bottom graph indicates that the trend is the same for both units and homes for January 2023.

Is the rental market still on a run? Is it consistent across Australia?

Housing Rental Market in Adelaide, Brisbane, Sydney, Hobart and Melbourne rents increades have stabilised. Perth is yet to reach its peak, and Canberra is still yet to reach the bottom of its decline.

For units, Sydney may be at its peak with Brisbane, Melbourne and Adelaide. Perth and Hobart is tracking behind the major capital cities, Darwin is stable and Canberra still to see the bottom of the rental decline.

What is the outlook for the housing market for 2023?

Tim Lawless five key points

1. The trajectory of housing values remains intrinsically linked with the path of interest rates.

2. Once interest rates move through a peak, it’s likely that housing values will stabilise.

3. Some downside risk from the large number of fixed rate mortgages due to expire later this year remains.

4. Advertised stock levels will be a key metric to keep an eye on.

5. With overseas migration accelerating, especially among foreign students, rental vacancies are likely to remain extremely tight in some markets, leading to further upwards pressure on rents. The rental market is already imbalanced, with vacancy rates holding around record lows.

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