2023 Sees 8.1% Boost in Aussie Property Values

CoreLogic’s benchmark Housing Value Index (HVI) in Australia marked an increase of 8.1% during 2023. This was a marked improvement from the 4.9% drop experienced in 2022, albeit still shy of 2021’s spectacular 24.5% surge. December’s modest 0.4% ascent enabled 2023 to wrap up with a soft but appreciable monthly rise in property values.

The research director at CoreLogic, Tim Lawless, noted that this was the smallest monthly nationwide HVI growth since property values started soaring in February. Property value growth each month reached its zenith in May at 1.3%, followed by interest rate hikes in June and November. Additional pressures, including inflated living costs, escalating affordability concerns, an upswing in listed property and languishing consumer sentiment, have gradually cooled the market in the second half of the year.

A Year of Market Variety

Despite the annual increase of 8.1%, 2023 was marked by a wide-ranging diversity. Throughout the year, annual changes in property values swung from a 15.2% rise in Perth to a 1.6% drop in regional Victoria

One consistent pattern in 2023 was a growing disparity in property value growth rates across various capital cities. Property values in Perth, Adelaide, and Brisbane have been sprouting by more than 1% a month since May on average, whereas Melbourne and Sydney experienced a significant slowdown in growth following the June rate hike. 

Melbourne values dropped in November and December, while Sydney property values steadied with a monthly growth rate of just 0.2% in the final two months of 2023. Minor capital cities remained slow throughout the year, with Hobart (-0.8%) and Darwin (-0.1%) recording yearly declines in 2023, while the ACT experienced a mere 0.5% rise.

City and Regional Values: The Divide

Most capital cities marked stronger growth compared to regional areas in 2023. Aggregate capital city values increased 9.3%, more than doubling the regional growth of 4.4%. 

Tim Lawless explained that stronger conditions in the capital city markets represented a reversal of the immediate impact of COVID, which saw regional markets benefitting from an influx of internal migrants. Regional migration normalised during 2023, and the significant value gains accumulated between 2020 and 2022 made the regional markets less economical.

Towards the end of 2023, despite a rise in property values across most regions, five out of eight capitals were still registering values lower than record highs.

At Peel Finance Brokers, we are keenly aware of these shifting trends in the Australian property market. We offer sound advice and personal finance solutions to navigate these changes effectively. Whether you’re looking to purchase a new home or invest in property, our team of experienced brokers can guide you in finding the best mortgage and finance deals. Contact us today!

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