CoreLogic results for November showed that house price gains continued to soften in November after record gains, increasing by 1.1% at the 5 capital city aggregate level. The largest markets of Sydney (0.90%) and Melbourne (0.59%) pulled down growth, while smaller, more affordable markets on the east coast continued to run hard, Brisbane (incl Gold Coast) surged 2.83% for the month, followed by Adelaide 2.48%.
The investor segment of the market has been strong, while owner occupier activity has started to ease – likely reflecting waning fiscal stimulus and perhaps some would be owner occupiers tapping out as prices have spiralled higher. It’s become extremely difficult for first home buyers to enter the detached housing market without parental assistance. Many cities are now roughly $1 million for a house, requiring a $200,000 deposit plus closing costs (difficult without parental help – or some next level savings habits, white rice diet anyone?).
On the positive side, supply chain issues and high building costs are supporting house prices. The potential for immigration to return en masse is also another factor many will be looking at in their bull thesis.
Until next time.