CoreLogic house prices: Values go backward across four capital cities as Melbourne continues to struggle

House prices have gone backwards across four capital cities and the pace of growth elsewhere is slowing, a sign Australia’s housing market might finally be losing momentum.

The latest figures from CoreLogic’s Home Value Index show Melbourne has the worst capital city housing market in the country, with house values declining -0.1 per cent in September. The poor result followed a -1.1 per cent decline in the quarter and -1.4 per cent decline annually.

Melbourne is now the third cheapest capital city in which to buy a home, with a median dwelling value of $777,390.

Hobart, Canberra, and Darwin also posted negative figures in the September quarter — -0.8 per cent, -0.9 per cent, and -0.7, respectively.

Across the Nullarbor, the story is vastly different.

Perth has posted the biggest change in dwelling values nationally, with 1.6 per cent in September and a whopping 24.1 per cent annually.

But there are signs the market in the west is coming off the boil, with the September quarter growth of 4.7 per cent lower than previous quarters.

Sydney just managed to push values into the positive with a modest 0.5 per cent rise — the lowest growth result since the three months ending February 2023 when values were down -0.3 per cent.

Nationally, housing values rose 1 per cent in the September quarter, the lowest rise in the national Home Value Index over a rolling three-month period since March 2023.

CoreLogic’s research director Tim Lawless said the slowdown in the pace of growth was the result of new listings coming onto the market for the busy spring and summer selling period, a reduction in auction clearance rates and houses staying on the market for longer.

New listings to the market are 3.2 per cent higher than a year ago nationally, 8.8 per cent higher than the previous five-year average for this time of year.

The CoreLogic report indicated the immediate outlook for housing markets was for further growth in values, “at least at the macro level, but a continuation in the gradual loss of momentum and increasing diversity across the cities and regions”.

Housing affordability remains a problem with the portion of household income required to service a new mortgage for the median income household at record highs in the June quarter at 50.3 per cent.

The dwelling value to income ratio, at 7.9, is only marginally lower than record highs and it would take 10.6 years for a household on the median income to save a 20 per cent deposit to buy the median value dwelling (if they can save 15 per cent of their income each year), the report found.

Rental growth appears to have peaked nationally, the result of an easing of net overseas migration and rental affordability pressures.

“The latest demographic trends from the ABS showed net overseas migration reduced by 19 per cent from the record highs in the first quarter of 2023,” Mr Lawless said.

“The March quarter of 2024 saw 133,800 net overseas migrants arrive in Australia, 31,700 fewer than a year prior, helping to take some pressure off rental demand.

“Our affordability metrics indicated that the median income household would require around a third of their income to service the median rent value across Australia in June.

“It wouldn’t be surprising if the average household size has continued to increase as group households and multigenerational households become more common in the face of high rental costs.”