What are leading property indicators doing this March?

1. Home values starting to soften

The research firm has reported that home values are up 20.6 per cent in the last year (0.6 per cent in February) compared to a recent high of 22.4 per cent in the year to January. This follows the cycle peak of 2.8 per cent recorded in March 2021.

2. Highest and lowest rates of growth

Brisbane has seen the largest annual growth rate in house values among regional and capital city dwelling markets at 29.7 per cent, while regional Northern Territory had the lowest rate of value appreciation, at 7.1 per cent.

Meanwhile, lower-value segments continue to outperform higher-value markets in terms of growth. The top quartile of capital city property values saw an increase of 0.8 per cent in the three months to February, compared to 3.4 per cent for the bottom quartile.

3. Uptick in sales volumes

The upward trend in sales volumes the past year was sustained as sales increased by 37.7 per cent to an estimated 650,175 in the 12 months leading up to February.

Moreover, the number of transactions remained high in February, with CoreLogic reporting 57,427 transactions – 46.1 per cent higher than the previous five-year February average.

4. Lift in advertised stock

There is more advertised stock on the market than normal, with a 4.8 per cent rise in new listings in the four weeks ending 6 March at the national level, compared to the same period in 2021.

Still, total listings are significantly below average for this time of year at the national level, owing to high sales volumes, which have seen about 1.2 transactions for every new property brought to the market in recent months.

5. Marginally longer days on market

Motivated by the booming property market, more vendors have put up their homes for sale. However, as the number of new listings increased, CoreLogic has reported properties are beginning to take a little longer to sell.

The median number of days on market in the three months to February was 30, up from a recent low of 21 days in the three months to December.

6. Discounting levels at record low

Due to brisk selling activities, discounting levels are near historic lows. This is despite CoreLogic reporting a marginal increase of -3.2 per cent in vendor discounting across the combined capital city markets.

7. Clearance rates are decreasing

In the four weeks leading up to 27 February, clearance rates have averaged 72.4 per cent. This is down from 78.8 per cent in the same period in 2021. With slower housing value increases, CoreLogic has projected clearance rates will also see further falls.

8. Rent values also on the rise

For the rental market, Australian rent values grew 8.7 per cent in the year to February, down from a previous cyclical high of 9.4 per cent in the year to November.

9. Dip in loan approvals

Amid a wave of loan applications and approvals between August 2020 to December 2021 due to enticingly low-interest rates, detached house approvals shrunk -17.3 per cent in January with only 4,045 units approved – the lowest number on record since July 2012.

10. Lending at an all-time high

Home loans have reached a new high of approximately $33.7 billion as of January, with an all-time high of $11 billion going to investor buyers.

Even with these new highs, CoreLogic has reported that lending growth stepped on the breaks last month to 2.6 per cent, down from 4.4 per cent the prior month.

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