Australia’s property market has experienced a V-shaped recovery, with the national Home Value Index (HVI) hitting a new record.
According to the CoreLogic index, dwelling values have regained all of the losses from the recent downturn and surpassed their previous peak.
The HVI shows that after reaching a peak in April last year, national home values fell 7.5 per cent, finding a floor on 29 January 2023.
Since bottoming out, the national HVI has risen 8.1 per cent, taking the market to a new record high on Wednesday, November 22.
CoreLogic’s Executive Research Director, Tim Lawless, said it took about nine months for the national HVI to move from record highs to the recent trough, then roughly 10 months to recover from the short but sharp downturn.
“The ‘V’ shaped recovery may seem counter intuitive, given high interest rates, deeply pessimistic levels of consumer sentiment and high cost of living pressures, however the recovery can be explained by an imbalance between supply and demand,” Mr Lawless said.
“From a supply perspective, advertised stock levels have held remarkably low through 2023.
“Although inventory levels are now rebalancing as vendor activity picks up, listings remain 16.6 per cent below the previous five-year average nationally.
“At the same time, demonstrated demand, based on the volume of homes sales, is trending roughly in line with the five-year average.”
While the national index has reached a new record high, the headline figures hide a growing level of diversity in housing market conditions.
Across the capital cities, Perth, Adelaide and Brisbane are all at record highs, with their regional counterparts Regional WA, Regional SA and Regional Queensland also at new peaks.
Dwelling values in Perth have climbed 12.3 per cent this year, while Brisbane’s have risen 11.3 per cent and Adelaide 7.7 per cent.
At the other end of the scale is Hobart, where values remain 11.8 per cent below their peak and Regional Victoria, where dwelling values are 7 per cent below their record highs.
As housing values continue to trend higher across most regions, Mr Lawless said it was likely more areas would return to record high housing values.
“While this is great news for homeowners, for those looking to buy, affordability pressures are becoming more pressing amid rising values, high interest rates and worsening serviceability challenges,” Mr Lawless said.
“The good news for prospective buyers is that the pace of growth is clearly easing in some markets as advertised stock levels rise and purchasing demand remains fragile.”