Valuation volumes throughout 2024 have been stable, supported by steady demand in the Australian housing market. However, as the market starts to turn with softening conditions and lower auction clearance rates, Australia’s housing market offers both risks and opportunities for valuers approaching 2025.
CoreLogic’s latest housing data reveals key trends likely to influence residential valuations, particularly as broader economic factors, such as interest rates and inflation, continue to impact market conditions.
The number of valuations has climbed 4.1% year-on-year, a strong figure amid an economic slowdown. Surprisingly, construction-related valuations, which support financing prior to new builds, accounted for 11% of the total increase in valuation activity.
The refinancing factor on valuations
While the property market shows signs of softening, valuation volumes are expected to hold steady, with refinance activity potentially increasing as homeowners look to lock in current property values before any potential declines.
Refinancing is likely to remain the most resilient driver within the valuation industry. ABS data shows a peak in refinancing activity back in March 2023, when $21 billion in mortgage debt was refinanced. This has since levelled out to $16 billion as of September 2024, representing about 35% of all new lending—aligned with long-term averages. While many fixed-term loans from the pandemic era have now expired, recent borrowers may still consider refinancing in 2025, especially as anticipated interest rate reductions create favourable lending conditions.
Purchasing-related valuations, however, may face short-term constraints. The higher for longer interest rate environment and stretched housing affordability are impacting buyer sentiment, which is evidenced by a 7.1% drop in national sales volumes in the three months to October and declining auction clearance rates in major capital cities. These trends point to fewer active buyers in the market, particularly in markets like Sydney and Melbourne, where prices have surged in recent years.
Preparing for a 2025 market shift
While the current market presents challenges, 2025 may bring a potential shift, particularly in the second half of the year. Should the Reserve Bank lower interest rates, the housing market may see renewed purchasing demand, and transaction volumes could rise. High-growth areas such as Perth, already showing resilience, could see particularly strong activity.
For valuers, this expected shift is a call to stay ahead by leveraging timely insights and accurate data - timely and accurate valuations will be critical as the market evolves.
The outlook for construction valuations hints at a gradual decline as construction approvals remain below the decade average by 13%. The backlog of incomplete dwellings, however, may sustain the current valuation volume, creating a stabilising force even amid sector pressures. Despite the decline in new approvals, 251,000 dwellings await completion, well above the 20-year average of 200,000.
Overall, it appears that 2025 will offer relatively stable valuation volumes, with refinancing activity sustaining the industry through softening conditions, before a potential uptick in the market in the back half of the year.
Equip yourself with the insights and tools to navigate 2025’s valuation landscape with confidence. Visit CoreLogic’s valuation solutions here and stay updated on our latest property research here.
Meet Carl Pinto
General Manager of Valuations
Carl Pinto is General Manager of Valuations at CoreLogic
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