CoreLogic Report: Australian Home Prices Surge 8.1 percent

Gain insights into the 2023 CoreLogic report, revealing a notable 8.1% surge in Australian home prices amidst economic fluctuations.

Australian home prices experienced a notable turnaround in 2023, with a rise of 8.1% compared to the 5% dip seen in 2022. However, the pace of growth slowed in the final months of the year due to interest rate hikes and persistent cost of living pressures. According to property consultant CoreLogic, the 8.1% increase is significantly lower than the 24.5% surge recorded in 2021. In December, prices saw a modest 0.4% increase, marking the smallest monthly gain since February. Sydney saw an 11.1% annual rise, but prices remained 2.1% below their January 2022 peak, with a median home value of just under A$1.13 million ($769,530). Other cities also experienced surges, with Perth up 15% and Brisbane up 13%, while Melbourne saw a more modest increase of 3.5%. However, CoreLogic analysts noted that higher interest rates and inflation, affordability challenges, rising advertised stock levels, and low consumer sentiment have tempered the market in the second half of the year. This trend is expected to continue into the first half of 2024, according to CoreLogic Research Director Tim Lawless.

CoreLogic Report: Australian Home Prices Surge 8.1%

The Reserve Bank of Australia (RBA) raised interest rates by a quarter point to 4.35% in November due to concerns about unmoored inflation expectations. Since May of the previous year, the RBA has increased interest rates by a total of 425 basis points. Australian households are facing financial pressure from high inflation, which peaked at 7.8% in December before slowing to 5.4% in the third quarter. However, the RBA believes that the vast majority of borrowers are able to service their mortgages.

While Australian home prices experienced a turnaround in 2023, the pace of growth slowed in the latter part of the year due to interest rate hikes and cost of living pressures. The market is expected to continue to be tempered in the first half of 2024.