Australian housing values are rising at the fastest annual pace since June 1989, but the monthly rate of growth is finally losing steam.
CoreLogic's Home Value Index rose another 1.5% in September, taking Australia's housing values 20.3% higher over the last 12 months.
According to the report, the annual growth rate is now tracking at the fastest pace since 1989.
Although growth conditions remain positive, September's results are down on the peak rate of growth in March when dwelling values nationally increased by 2.8%.
ABS data released today also shows that in August, new home loan commitments fell 4.3% for housing.
For owner-occupier home loans, housing fell 6.6%.
In August 2021 in seasonally adjusted terms for owner-occupier first home buyers, the number of new loan commitments fell 3.0%, the seventh consecutive month of falls.
It fell 2.1% compared to August 2020, the first through-the-year decline seen in two years.
Change in Dwelling Values
| Month | Quarter | Annual | Total Return | Median Value | |
| Sydney | 1.9% | 5.7% | 23.6% | 26.5% | $1,056,093 |
| Melbourne | 0.8% | 3.3% | 15.0% | 17.9% | $775,142 |
| Brisbane | 1.8% | 5.9% | 19.9% | 24.7% | $625,291 |
| Adelaide | 1.9% | 5.5% | 19.1% | 24.0% | $529,376 |
| Perth | 0.3% | 1.2% | 18.1% | 23.2% | $524,589 |
| Hobart | 2.3% | 6.4% | 26.8% | 32.5% | $659,622 |
| Darwin | 0.1% | 1.7% | 20.2% | 26.8% | $481,767 |
| Canberra | 2.0% | 6.9% | 24.4% | 29.0% | $838,904 |
| Combined Capitals | 1.5% | 4.7% | 19.5% | 22.9% | $759,753 |
| Combined Regionals | 1.7% | 5.1% | 23.1% | 28.6% | $503,609 |
| National | 1.5% | 4.8% | 20.3% | 24.1% | $674,848 |
Source: CoreLogic
The monthly change in housing values remains positive across every capital city and broad rest of state region, with Hobart (2.3%) and Canberra (2.0%) recording the largest growth.
Darwin (0.1%) and the recently revised Perth index (0.3%) recorded the softest growth conditions across the capitals.
Across regional Australia, regional NSW (2.0%), regional Tasmania (1.7%) and Regional Queensland (1.7%) led September’s capital gains.
CoreLogic's research director, Tim Lawless, believes the slowing growth conditions are the result of higher barriers to entry for non-home owners along with fewer government incentives to enter the market.
"With housing values rising substantially faster than household incomes, raising a deposit has become more challenging for most cohorts of the market, especially first home buyers," Mr Lawless said.
"Sydney is a prime example where the median house value is now just over $1.3 million. In order to raise a 20% deposit, the typical Sydney house buyer would need around $262,300."
Mr Lawless also pointed to the tough conditions first home buyers may face.
"Existing home owners looking to upgrade, downsize or move home may be less impacted as they have had the benefit of equity that has accrued as housing values surged," he said.
"The slowdown in first home buyers can be seen in the lending data, where the number of owner occupier first home buyer loans has fallen by 20.5% between January and July.
"Over the same period, the number of first home buyers taking out an investment housing loan has increased, albeit from a low base, by 45%, suggesting more first home buyers are choosing to 'rentvest' as a way of getting their foot in the door,” Mr Lawless said.
"Home lending continues record surge, but losing steam" was originally published on Savings.com.au and was republished with permission.