CoreLogic: Home vendors discounting less & selling quicker

Things are looking up for the property market, CoreLogic data shows, especially in Sydney.

Residz Team 3 min read

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If you're a potential home seller you'll be glad to hear about the latest findings from CoreLogic.

According to its May Monthly Housing Chart Pack, there's some positive news to share: home sellers are now offering smaller discounts, and properties are spending less time on the market.

First home buyers are also back in the mix. As a percentage of total buyers, first home buyers make up more than 24%, and that’s above average.  

It’s more evidence that things are looking up for the property market, especially in Sydney. Let's delve into the details and explore some of the recent trends.

Home values quarterly rise

Firstly, CoreLogic’s research reveals national home values saw a positive change, rising by 1% in the three months leading up to April. This is actually the first quarterly increase since May 2022, which is a promising sign for the market's recovery.

When we specifically look at the combined capital cities, dwelling values rose by 0.7% in April, following a 0.8% increase in March. This means that dwelling values have gone up by 1.4% since their lowest point in February of this year.

Interestingly, the high end of the Sydney housing market is experiencing the most significant growth, with a 4.0% increase in the three months leading up to April. This indicates that the luxury segment is thriving.

Number of sales down

In terms of sales, there has been a seasonal decline in April, with an estimated 35,398 sales nationwide. However, CoreLogic says this is expected for this time of year, and sales are still on par with typical patterns.

The time it takes to sell a property has started to decrease. The median days on the market across the country dropped to 33 in the three months leading up to April, down from 37 days in the previous three months.

Smaller discounts offered by vendors

CoreLogic reports vendors are also offering smaller discounts on their properties in the combined capital cities market.

The median vendor discount has decreased from -4.35% in the September quarter of 2022 to -3.88% in the three months leading up to April 2023. This suggests that buyers are facing less negotiating room in the current market.

In March 2023, new loan commitments (seasonally adjusted) rose 4.9% for housing. This is the first monthly rise since January of the previous year, and CoreLogic says it aligns with the positive data on home values and sales volumes during that period.

Listings are higher, but enthusiasm should cool

Looking at new listings, there has been a slight increase following a series of public holidays, with 31,356 new listings recorded nationally in the four weeks leading up to May 7, 2023. However, it is expected that listings will trend lower during the cooler months of the year.

In terms of clearance rates, the combined capital cities averaged a rate of 65.2% in the four weeks ending April 30, 2023. While this is a stronger result compared to the end of 2022, it did see a slight drop from the previous four-week period.

Record rent increase makes life harder for tenants

When it comes to rental values, CoreLogic shows there has been a steady annual growth of 10.1%. Across the combined capital cities, rental values rose by 11.7% in the past 12 months, which is the highest annual increase on record.

With other cost of living pressures, the robust rental market is very tough on low income tenants.

Gross rent yields have remained relatively stable at 3.9% over the month, says CoreLogic. However, they have increased from 3.2% compared to the same month last year. In April, the highest gross rent yields were observed in resource-based markets such as Darwin, regional NT, and regional WA.

First home buyers coming back to market

First home buyers also played a significant role in the market;  according to CoreLogic the value of their finance rose by 12.3% in March.

First home buyers accounted for 24.7% of owner-occupier finance, surpassing the decade average of 23.7%.

Many will be moving to regional areas for affordability and lifestyle reasons.

CoreLogic shows the portion of home sales that occurred in regional Australia made up an estimated 37.0% of total sales in the three months leading up to April.

Although this is slightly lower than the peak of 42.3% in the three months to September 2020, it remains above the decade average of 35.3%.

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