The volatility the Australian housing market is currently experiencing can present considerable challenges for valuers.
Delivering accurate valuations is more complex when market conditions are shifting. Access to reliable data and insights into changing conditions becomes more important than ever to help valuers keep pace amid the fluctuations.
Current market conditions in Australia
While Australia has gone through one of the biggest housing market upswings in history, we are now experiencing an accelerating downward trend, influenced by rising inflation and interest rates.
CoreLogic housing data released in August and September reveals:
- During August 2022, housing values declined in every capital city except Darwin, with the combined capital housing values index falling by 1.6% in the 28 days to August 31.
- In the 12 months to August, sales volumes were 2.3% lower than the previous year due to lower buyer demand.
- Properties are now taking longer to sell – at 33 days compared to 20 days previously.
- In the three months to August, the national median vendor discount rate was 4%, an increase from the recent low of -2.8% recorded in the three months to April last year.
- Property purchase lending fell by 8.5% overall, and by 11% for investors.
What's happening in the capital cities?
The changes across Australia’s capital cities are varied, with the more expensive regions proving to be the most volatile. This includes Sydney and Melbourne, and the pricier suburbs of Hobart, Brisbane and Canberra. Unit values have been less volatile than house values as they are typically more affordable.
For example, in Q2 the largest falls in house values occurred in Sydney and Melbourne - with approximately 81% of house markets in Sydney and 80% in Melbourne experiencing falls. However, values increased in some of the more affordable cities such as Adelaide, Perth, and Darwin.
Outlook for the spring selling season
Spring is typically a busy season for the housing market. But this year, things are tracking a little differently due to the effect of inflation, higher interest rates and lower buyer confidence.
CoreLogic's main predictions for spring are that listings will increase, but the numbers will vary between regions. Properties are taking longer to sell than last year – which may lead to sellers offering discounts to make a quicker sale.
So how can valuers stay on top of their game?
Valuations are an integral component of the property ecosystem and become more challenging when the market is experiencing volatility.
Having access to accurate and up-to-date data is key to overcoming the challenges of a fast moving market – a lot can happen in three weeks, let alone three months.
The following tools have been curated to help valuers stay on top of their local markets, and provide relevant, meaningful insights to their clients to demonstrate their knowledge and expertise.
- Monthly housing chart pack
A monthly benchmark report that delivers detailed insights and charts into the factors influencing the residential property market. This allows valuers and research teams to provide detailed market commentary within their reports and presentations.
- CoreLogic Indices
Daily measures of movements and shifts in housing market values across Australia’s major cities, including day-by-day changes, today’s value, and percentage changes by quarter and year, ensuring valuers stay on top of shifting market conditions.
- Mapping the Market tool
An interactive mapping tool that can be used to look at suburb median property values and the changes that have occurred in CoreLogic’s home value index, offering a rich visual representation of markets across a wider geographic region.
Learn more about Mapping the Market.
- Pain & Gain report
Quarterly research paper that provides a national overview of the performance of houses and units across Australia, to give valuers a deeper understanding of housing growth trends.
The importance of providing valuations based on objective up-to-date data cannot be overemphasised. Doing so ensures a valuer's customers (and their customers) receive a valuation that is fair and accurate, and reflects the housing market as it is right now – at any given point in time.
CoreLogic Australia