Australia’s national property market is currently sending mixed signals. While the country has seen an impressive run of 20 consecutive months of property price growth, the pace of this growth is showing signs of slowing down.
20th Consecutive Month of Growth
According to CoreLogic, Australia’s median property price rose by 0.4% in September 2024, marking the 20th consecutive month of positive price movement. This consistent growth is indicative of the strong demand seen in the housing market, even amidst broader economic uncertainties. However, a closer look at the numbers reveals that while prices are still rising, they are not increasing at the same pace as before.
Over the three months to September, the national median property price increased by just 1.0%. This is the smallest quarterly rise since March 2023, back when this current cycle of growth was in its early stages.
Supply is Increasing, Slowing Price Growth
One of the key reasons for the slowing market is the rise in housing supply. More homes are being listed, making it harder for vendors to secure quick sales at their desired price points.
CoreLogic data shows that the number of new property listings in September 2024 was 3.2% higher than at the same time last year. This increase in listings has pushed supply 8.8% higher than the five-year average for this time of year.
This influx of new listings means more competition among sellers, which can slow down price growth as buyers have more options. Consequently, homes are sitting on the market for longer periods before being sold.
Auction Clearance Rates and Selling Times Decline
Auction clearance rates—a strong indicator of market demand—have also been trending downward. Across the combined capital cities, clearance rates dropped to the low 60% range in September, which is about 4 percentage points below the decade average.
Similarly, properties sold by private treaty are now taking longer to sell. The median time for a home to be on the market nationally was 32 days in the September quarter, up from 29 days in the June quarter and 27 days in the same period last year.
What Does This Mean for Buyers and Sellers?
For buyers, this slight slowdown in the market could be a positive signal, as increased supply and longer selling times may translate into more negotiating power. For sellers, however, it could mean having to temper expectations regarding how quickly their property will sell and at what price.
The long-term outlook for the market remains uncertain, as it will depend on a variety of factors, including interest rates, the broader economy, and further changes in housing supply.
In summary, while the Australian property market has experienced strong growth over the past 20 months, current indicators suggest the market is starting to cool off. Sellers may face more competition, while buyers could find themselves with more opportunities as supply rises.
