Property prices steady but slowdown coming: CoreLogic

The cost of housing climbed at a steady pace of 1.5 per cent through October, but a rise in listings and cost pressures may see rate of gains fall in the coming months.

Steve Miller and Gary Aschmoneit are selling their renovated property at Randwick in Sydney’s east. Picture: John Feder

Smaller capital city are achieving record price gains a year into the housing boom but experts are warning a likely slowdown in coming months.

Brisbane property prices climbed 2.5 per cent through October, marking the fastest monthly rise since 2003, according to property researcher CoreLogic. Meanwhile, Adelaide recorded the biggest month-on-month change since 2007, up 2 per cent.

Nationally, the cost of housing climbed 1.5 per cent last month, marking similar gains recorded in September and August.

CoreLogic’s research executive Tim Lawless said affordability pressures, the rising number of properties being added to the market and less stimulus was causing a slowdown in growth and a divergence in performance: “The market is becoming much more diverse and much more fragmented, depending on things like affordability, on migration, and on sentiment.”

Elsewhere, Sydney (up 1.5 per cent) and Melbourne (up 1 per cent) emerged from lockdown ahead, while Hobart (up 2 per cent), Canberra (up 1.9 per cent) and Darwin (0.4 per cent) also rose. Only Perth reported a fall, down 0.1 per cent.

In regional Australia, prices were up a combined 1.9 per cent.

AMP chief economist Shane Oliver warned “storm clouds are starting to gather”, flagging a further slowdown into next year.

“Listings are on the rise, reflecting the end of lockdowns and high prices; poor affordability is pricing more and more borrowers out of the market; a rotation in consumer spending back towards services as reopening occurs may reduce housing demand; higher interest rate serviceability buffers and likely further macroprudential controls will likely slow borrowing; fixed mortgage rates are on the rise; and the RBA is expected to start raising interest from late next year,” he said.

Randwick sellers Steve Miller and Gary Aschmoneit own just one of the 47,040 newly advertised properties added to the market over the past four weeks. New listings are up 47 per cent from a very low base, with total listings 22.7 per cent higher than last year.

“The market is just so red hot, so we thought why not bring our retirement forward,” Mr Miller said. “I feel the market will change in the next six to 12 months, so we want to get (the sale) done. (The banks) are tightening lending so buyers will want to buy now … and because our property is a unique offering of a whole block, we are finding a lot of investors want to make deals fast before rates rise.”

The couple is listing the art-deco, six-bedroom property across two residences with Ray White Eastern Beaches director Nicholas Wise at auction on November 20.

Mr Oliver forecasts capital property prices to slow to 5 per cent gain over 2022 before falling 5 to 10 per cent in 2023.