Australia’s Home Prices Increase Slightly in September, Rents Experience Minimal Growth – Reuters

SYDNEY (Reuters) – Home prices in Australia experienced a modest increase in September, coinciding with a surge in listings that reached a three-year high. Additionally, lower auction clearance rates indicate that the momentum in the previously booming market has slowed as the typically busy spring season begins.

According to data from property consultant CoreLogic, released on Tuesday, national prices rose by 0.4% in September, consistent with the 0.3% growth recorded in both July and August.

The monthly price increase was propelled by a 1.6% rise in Perth, a 1.3% gain in Adelaide, a 0.9% increase in Brisbane, and a 0.2% uptick in Sydney. However, Melbourne saw a slight decline of 0.1%.

"If the first month of spring is indicative, purchasing activity isn’t keeping up with the influx of new listings," noted Tim Lawless, CoreLogic’s research director, highlighting that new listings have reached their highest level since 2021.

"A further increase in advertised supply is advantageous for buyers, but it presents more competition for sellers, potentially leading to softer selling conditions."

In fact, auction clearance rates in capital cities have fallen to the low 60% range, about four percentage points below the decade average. Homes sold via private treaty are also remaining on the market longer, with a median duration of 32 days.

During the September quarter, rental prices increased by just 0.1%, with Sydney, Brisbane, and Canberra registering decreases. This trend may be welcome news for the Reserve Bank of Australia (RBA), which has expressed concern that rising rents are fueling inflation.

The RBA has been behind other global central banks in terms of easing policies and has ruled out a rate cut by year-end. However, with inflation expected to decline sharply in the third quarter, markets are anticipating a 78% likelihood that a rate cut could occur in December.

CoreLogic stated, "A reduction in interest rates is becoming increasingly probable, either late this year or early next year. This could enhance borrowing capacity and foster greater confidence among households for significant financial commitments, such as buying a home."

The RBA has also warned borrowers to be cautious about accumulating excessive debt when rates begin to decrease.