Australian housing values grew 22.1% last year, but according to CoreLogic data the rate of growth is slowing across most capital cities.

CoreLogic's Property Pulse report shows while the rate of dwelling value appreciation is slowing, capital city and broad ‘rest of state’ markets are yet to peak.

CoreLogic’s Research Director Tim Lawless outlined how to identify a market has peaked, and the trends property watchers should be keeping an eye on.

"To categorise a market peak across a region, we would generally be looking for a consistent trend in negative monthly movements," Mr Lawless said.

"To date, the quarterly trend remains positive across the major regions, with the only exception being Darwin houses, which is the only capital city housing sector to record a negative quarterly change."

Mr Lawless also explained the difference in identifying peak growth and peak rate of growth.

"Although we can’t see any evidence that specific housing markets have peaked, it is clear that most markets have moved through a peak rate of growth," he said.

"What I mean by that is the point at which markets achieved their biggest monthly growth rate. We saw most of the capitals moved through a peak rate of growth around March last year."

Queensland still seeing growth

"The only broad regions avoiding a slowdown in the pace of growth in housing values are Brisbane, Adelaide and regional Queensland," Mr Lawless said.

"These markets are benefitting from a healthier level of affordability compared with the largest capitals along with a positive demographic trend and consistently low advertised stock levels.

"We could see our two biggest capital city markets Sydney and Melbourne hit their peak later this year although the timing is highly uncertain and depends on a broad range of influences."

Also read: Brisbane suburbs tipped for growth in 2022

Key signals a market is approaching its peak

"Normally, housing growth trends will gradually slow before moving into a correction phase, which is what we are seeing at the moment," Mr Lawless said.

"However, this isn’t always the case. During periods of shock such as the GFC or early in the pandemic, housing trends turned quite sharply into negative territory."

Other signs to watch for include:

  • Rising advertised stock levels.
  • Affordability constraints.
  • Weakening auction clearance rates, and
  • Softening vendor metrics such as longer days-on-market and larger levels of discounting.

What to expect following a market peak

“Once a market peaks, the typical trend is that values will experience a period of decline,” Mr Lawless said.

“The duration and severity of the decline is dependent on a broad range of both macro and micro factors.”

Since the late 1980s, Australia has experienced national downturns that have ranged in severity from a -1.0% peak to trough decline in 2015-16, a temporary correction following the first round of credit tightening via the prudential regulator's 10% 'speed' limit on investment lending, to the most recent -8.4% decline experienced during the 2017-19 downturn.

Decline2Recovery.PNG

Source: CoreLogic

Advertisement

Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner occupiers.

Update resultsUpdate
Filters
LenderHome LoanInterest Rate Comparison Rate* Monthly Repayment Repayment type Rate Type Offset Redraw Ongoing Fees Upfront Fees Max LVR Lump Sum Repayment Additional Repayments Split Loan Option TagsFeaturesLinkComparePromoted ProductDisclosure
6.04% p.a.
6.06% p.a.
$3,011
Principal & Interest
Variable
$0
$530
90%
4.6 Star Customer Ratings
  • Available for purchase or refinance, min 10% deposit needed to qualify.
  • No application, ongoing monthly or annual fees.
  • Quick and easy online application process.
Disclosure
5.99% p.a.
5.90% p.a.
$2,995
Principal & Interest
Variable
$0
$0
80%
Apply in minutes
  • No application or ongoing fees. Annual rate discount
  • Unlimited redraws & additional repayments. LVR <80%
  • A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.
 Disclosure
6.09% p.a.
6.11% p.a.
$3,027
Principal & Interest
Variable
$0
$250
60%
  • No annual fees – None!
  • Get fast pre-approval
  • Unlimited additional repayments free of charge
 Disclosure
5.69% p.a.
6.16% p.a.
$2,899
Principal & Interest
Fixed
$0
$530
90%
  • Available for purchase or refinance, min 10% deposit needed to qualify.
  • No application, ongoing monthly or annual fees.
  • Flexibility to split your loan with both fixed and variable rates
 Disclosure
Important Information and Comparison Rate Warning

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. Some products will be marked as promoted, featured or sponsored and may appear prominently in the tables regardless of their attributes. All products will list the LVR with the product and rate which are clearly published on the product provider’s website. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of . View disclaimer.

Important Information and Comparison Rate Warning

Image by Samuel Scrimshaw via Unsplash



Ready, Set, Buy!


Learn everything you need to know about buying property – from choosing the right property and home loan, to the purchasing process, tips to save money and more!

With bonus Q&A sheet and Crossword!

Download Free
By subscribing you agree to our privacy policy