Housing market outlook

Our newsletters are dedicated to providing news, articles, tips and tricks related to home loans, car loans, property, finance, insurance and much much more.Recent data would suggest the housing market has officially moved through its peak growth phase.

For example in Sydney, affordability constraints and tighter lending conditions have led to slower price growth. Over the past three months, Sydney’s property values have risen by approximately 0.5%, which is the lowest rolling quarterly gain since June 2016.

Melbourne has performed slightly better, with dwelling values climbing 1.9% over the past three months. Pleasingly, clearance rates continue to sit above 70%, while inventory levels also remain tight throughout the capital city.

In Perth and Darwin, property prices have continued to trend lower. Thankfully, the annual trend suggests the rate of decline is easing. Since peaking in 2014, Perth dwelling values have declined by a total of 10.8%, while the cumulative decline across Darwin has been more severe, with values down 18.6% from the market peak.

The silver lining around the decline in values is a substantial improvement in affordability. Based on a dwelling price to income ratio, Darwin is Australia’s most affordable capital city with a ratio of 4.4. This means dwelling prices are typically 4.4 times higher than gross household incomes across the city.

Overall, the outlook for Australia’s housing market depends on a broad range of factors, including local economic and demographic conditions, as well as supply factors and credit policies. If the current trends continue, we could see dwelling values across Australia’s two largest housing markets, Sydney and Melbourne, trend lower as they move through their cyclical peaks.

Tim Lawless, CoreLogic RP Data

Things can change quickly in the market.

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