Adelaide<\/a> remained on a solid trajectory in terms of price growth compared to other capital cities in November.<\/p>\nCoreLogic\u2019s latest Hedonic Home Value Index showed that both Brisbane and Adelaide were the only capital cities yet to experience a slowdown in prices.<\/p>\n
In fact, both cities\u2019 monthly growth reached a new cyclical high in the month, with Brisbane hitting 2.9% (highest in October 2003) and Adelaide achieving 2.5% (the highest since February 1993).<\/p>\n
These gains translate to a monthly rise of around $18,500 in Brisbane and $13,500 in Adelaide.<\/p>\n
CoreLogic research director Tim Lawless said capital cities are now showing greater diversity, with Brisbane and Adelaide now taking the lead while conditions in Sydney and Melbourne slowed more sharply.<\/p>\n
\u201cSydney and Melbourne have seen demand more heavily impacted from affordability pressures and negative migration from both an interstate and overseas perspective,\u201d he said.<\/p>\n
The divergence can also be seen in the supply dynamics in these capital cities.<\/p>\n
Over the four weeks to November 28, the total housing supply across Adelaide was 32% lower than the five-year average and 33.9% lower in Brisbane.<\/p>\n
On the other hand, housing stock has become \u201cnormalised\u201d in Sydney and Melbourne, with listings just sitting 2.6% below the five-year average in the former and above 7.9% in the latter.<\/p>\n
While housing values continued to rise, the overall growth rate of 1.3% in November was the softest outcome since January, when values increased by 0.9%.<\/p>\n
\u201cVirtually every factor that has driven housing values higher has lost some potency over recent months,\u201d Mr Lawless said.<\/p>\n
\u201cFixed mortgage rates are rising, higher listings are taking some urgency away from buyers, affordability has become a more substantial barrier to entry and credit is less available.\u201d<\/p>\n
Growth trends<\/h2>\n
The housing segment continued to outpace the unit segment in terms of price growth in November.<\/p>\n
However, the gap is narrowing, with the overall housing values rising 1.2% while unit values increasing by 0.7%.<\/p>\n
Meanwhile, capital city houses are now 37.9% more expensive than capital city units, the largest difference on record.<\/p>\n
This gap means that a capital city house is averaging approximately $240,500 more than a capital city unit.<\/p>\n
In Sydney, the gap is worse, with houses costing $523,000 more on average than a unit.<\/p>\n
\u201cWith such a large value gap between the broad housing types, it\u2019s no wonder we are seeing demand gradually transition towards higher density housing options simply because they are substantially more affordable than buying a house,\u201d Mr Lawless said.<\/p>\n
Another interesting trend is the less obvious slowdown in regional areas, where the monthly pace of capital gains continued to accelerate over the past three months.<\/p>\n
Across regional Australia, the coastal and lifestyle markets with NSW\u2019s Southern Highlands and Shoalhaven were the best performers, achieving the highest quarterly growth of 9.7%, followed by Hunter Valley\u2019s 8.9%, and Tasmania and Launceston and North East region\u2019s 7.7%.<\/p>\n
Outlook remains positive despite concerns<\/h2>\n
While the growth has lost momentum across most Australian housing markets since April, the outlook remained positive.<\/p>\n
However, it appears most factors that have been pushing house prices higher have already ended.<\/p>\n
\u201cA further increase in available supply should help to take more heat out of the market as buyers have more choice and less urgency,\u201d Mr Lawless said.<\/p>\n
The era of ultra-low rates is also ending as fixed rates rise.<\/p>\n
Buyers, however, can take comfort in the fact that variable rates are less likely to increase unless the official cash rate is raised, which is still expected to be more than a year away.<\/p>\n
There are also expectations for tighter credit policies, which could slow housing activity further.<\/p>\n
Still, there are tailwinds which are seen to support the housing in the short term, including the low cost of debt and the impending resumption of interstate and overseas migration.<\/p>\n
\u2014<\/p>\n
Photo by Brisbane Local Marketing on Unsplash.<\/p>\n<\/p><\/div>\n
![\"Brisbane](\"https:\/\/fmsto.blob.core.windows.net\/cms\/images\/055\/0004_637739275587261606.jpg\")
<\/p>\n