Equities outperform property as housing market slows
Not published yet- Written by: Liam Garman
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The findings from the CoreLogic Housing Chart Pack for January found that Australia’s equity market grew by 11.4 per cent over the year while housing grew at a rate of 8.3 per cent.
It represents a fall from 13.5 per cent over 2023.
However, longer-term data illustrated that housing has outperformed equities for six of the last 10 years, recording a 132.6 per cent return compared to 126.4 per cent.
CoreLogic economist Kaytlin Ezzy outlined that a range of economic factors underpin the outcome.
“Despite uncertainty in the global and domestic economic outlook and the cost-of-living crisis, the ASX reached a series of new record highs in 2024, buoyed by moderating inflation, coasting economic conditions and a strong outing from the banking sector,” she said.
“Despite showing some resilience in the first half of the year, the accumulation of stock, and the higher for longer interest rate environment has seen the change in dwelling values slow, and, in some cities, shift into negative territory.
“Similarly, the normalisation in net overseas migration and the increase in the average household size has seen rental growth continue to ease over the year.”
The findings come as the number of days on the market trended higher over the December quarter, growing from 28 days to 33 days on the market.
Though, the time on market did not seem to impact vendor discount rate, dropping from -3.8 per cent to -3.6 per cent year-on-year for the December quarter.
“Although subtle, this suggests that sellers have been relatively realistic and are more willing to meet the market when setting initial listing prices,” she explained.
“However, if stock continues to accumulate and values trend further downward, the gap could widen and vendors may have to offer larger discounts in order to secure a sale.”
Despite this, housing remains Australia’s largest asset valued at $11.1 trillion, as opposed to the stock market at $3.3 trillion.