Greater buyer choice linked to home price growth slowdown in November

More homes on the market and greater buyer choice has caused the slowdown in property price growth through November, according to property researcher PropTrack.

Nick and Natalie Humzy-Hancock with their children. The family is moving to the Adelaide Hills from Brisbane and were surprised at just home strong house prices in both cities are.

Greater buyer choice through the warner spring months has led to a slowdown in home price growth through November, according to new PropTrack data.

National price growth slowed to an increase of 0.26 per cent through November, the latest PropTrack Home Price Index figures show, with the change in pace coinciding with the first interest rate in four months. All capital cities except Darwin experiences a rise in prices last month and prices in regional Australia were up 0.12 per cent.

PropTrack senior economist Eleanor Creagh said greater buyer choice in the market through spring is causing the more modest gains. However, there is still not enough homes available.

“Despite interest rates climbing again in November and the flow of listings hitting the market increasing, housing demand has remained strong and national prices have now risen for 11 straight months,” Ms Creagh said.

“Looking ahead, price growth is expected to continue as the positive tailwinds for housing demand and a slowdown in the completion of new homes counter the sharp deterioration in affordability and slowing economy.”

Capital city prices lifted 0.26 per cent through November, led by Perth which was up 0.74 per cent. Adelaide rose 0.34 per cent and a 0.32 per cent increase was recorded in Sydney and Canberra. Hobart held steady (up 0.03 per cent), while Darwin dipped 0.12 per cent.

In Brisbane, where prices were up 0.2 per cent, Nick and Natalie Humzy-Hancock are preparing to relocate to Adelaide for work and are in the midst of selling their inner-city Norman Park home.

Mr Humzy-Hancock said he was surprised by the strength of both markets.

“We just don’t have the product coming through to meet demand. The cost to build a house now is (higher), if we sold our house tomorrow and went to build it again, I don’t think we could,” he said

“What shocked us was Adelaide in particular, is we thought we’d be buying two houses down there. That market is just as tight, if not harder to sort of break into.”

Place Woolloongabba principal Denis Najzar, who is selling the couple’s home, does not believe prices will fall in the River City in the decade run up to the 2032 Olympic Games.

“People are coming to Brisbane and there is a lack of supply,” he said.

“They are looking for a completed home ready to move in given the construction challenges of the past few years.”

Analysis by national real estate agency Ray White found listing levels in the bellwether cities of Sydney and Melbourne have been bellwether markets have remained elevated on last year’s numbers. The firm’s data analyst Will Clark the finding is a “major relief” for the national market, showing listing have held up despite continued interest rate hikes in 2023.

The number of people signing on to sell with the agency in the coming weeks has also remained elevated on the levels compared to the past two years.

“New listings finished just shy of their October peak, and were down on where we would have expected given strong mid-year results,” Mr Clark said.

“New listings volume saw a weak start to 2023. If we attribute this diminished activity to elevated interest rates, it is unlikely we will see the records in 2021 tumble any time in 2024.”

PropTrack’s Ms Creagh said prices are likely to lift at a slower pace next year than they have across 2023.