The Australian housing market is showing signs of fatigue after nearly two years of consistent growth, with Sydney and Melbourne leading a slowdown in November.
CoreLogic’s latest data reveals the weakest monthly result for national property prices since the growth streak began in January 2023.
Nationally, home values edged up by just 0.1% last month, bringing the median house price to $812,933. However, Sydney and Melbourne both posted declines, with Melbourne recording the largest drop of -0.4%, while Sydney fell by -0.2% for the second consecutive month.
Turning point for housing prices?
Tim Lawless, CoreLogic’s research director, suggested that November could mark the end of the current growth cycle, particularly as momentum slows even in mid-sized capitals and regional markets that have been key drivers of price increases.
“While the mid-sized capitals and most of the regional markets continue to provide some support for growth in the national index, it is clear momentum is also leaving these markets,” Lawless said.
Melbourne’s housing market has been hit particularly hard, with prices falling in over 10 of the past 12 months for a total decline of 2.3% this year. In Sydney, prices peaked in September and have since trended downward, with November marking a second straight month of declines.
The slowdown coincides with an increase in property listings. Compared to the five-year average, listings are up 10.4% in Sydney and 9.1% in Melbourne—the highest levels for this time of year since 2018.
Bright spots in Perth and regional markets
Perth continues to outperform other capitals, with house prices rising 1.1% in November and 3.0% over the spring quarter. However, even Perth’s growth is tapering, with its spring performance less than half the 6.7% increase recorded in the June quarter.
Regional markets have shown resilience, outperforming the capital cities with a combined housing index increase of 1.1% over the past three months. Regional Western Australia led the way with a 3.3% price rise, although regional Victoria bucked the trend, recording a 0.9% decline.
Rental market growth cools
Meanwhile, rents increased in all capital cities in November, with a modest 0.2% rise in the national rental index. This marks a significant slowdown from last year’s rental boom, where annual increases reached 8.1%. Over the past 12 months, rents have risen by 5.3%, more than double the pre-pandemic decade average of 2%.
“Beyond any seasonality, it looks increasingly like the rental boom is over,” Lawless commented, noting the potential for a rebound in the first quarter of 2025 due to seasonal factors.
