Cotality Australia research director Tim Lawless said home sales were up an estimated 2 per cent over the past 12 months and 4 per cent over the previous five-year average. But advertised supply is around 20 per cent down on the average for this time of year.
“Once again, we are seeing a clear mismatch between available supply and demonstrated demand placing upwards pressure on housing values,” he said.
“We are starting to see the usual start of spring upswing in new listings coming to market, but from a low base. A pick-up in the flow of stock coming to market through spring will be good news for buyers who generally have limited choice at the moment.”
The shortage of supply is also affecting the rental market. The national vacancy rate was at 1.5 per cent in August. The pre-2020 average was about 3.3 per cent.
Values for units and apartments vary widely across the capitals. In Sydney and Melbourne, values lifted by 0.6 per cent and 0.2 per cent, respectively, in August. Over the past year, they have been flat in Sydney, while they are down by 1.2 per cent in Melbourne.
However, values in Brisbane climbed 1.3 per cent in August to be 11.1 per cent up over the past year, while in Perth they lifted another 1.1 per cent last month for an annual growth rate of 10 per cent.
In Canberra, where a rush of supply has flowed into the market over the past year, values fell by 0.2 per cent in August to be down 0.1 per cent over the past year.
Cotality reserch director Tim Lawless says affordability issues will keep a lid on house prices.Credit: Peter Rae
Lawless said it was unlikely prices would accelerate to the highs recorded in recent years, such as the 30 per cent surge during the pandemic, due to housing affordability constraints.
“What is more likely is that home values will rise at a more sustainable pace, with demand dampened by affordability constraints, more normal rates of population growth, and cautious lending policy,” he said.
That affordability restriction has been eased by the Reserve Bank’s string of rate cuts so far this year.
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RBA data reveals that for the three months to the end of June, Australian homebuyers paid $19.9 billion in interest on their mortgages. Total repayments for the quarter were $31.6 billion.
It was the first time since the depths of the pandemic in 2021 that both interest and total repayments had fallen in a quarter.
Despite the reduction in the quarter, home buyers are still being squeezed. In the December quarter of 2021, they paid just $7.4 billion in interest as part of $18.5 billion in total repayments.
Total repayments have now gobbled up 10 per cent of household disposable income for a record 12 consecutive months.
While mortgage-holders have struggled as interest rates climbed, some were able to pay more than necessary on their loans. Excess repayments hit a record $13.7 billion in the December quarter of 2024. But they have fallen for the past two quarters, sinking to $10.6 billion in the June quarter.
