National home value growth slows to lowest rate since January

author-avatar By on September 01, 2021
National home value growth slows to lowest rate since January

Dwelling values rose 1.5% in August despite lockdown disruptions, but growth is starting to slow according to CoreLogic.

CoreLogic’s national home value index revealed dwelling prices grew 1.5% in August, a rate well above average but the slowest growth rate since January. 

According to CoreLogic, this is proof that the rate of price growth is moderating from its peak in March when it rose 2.8%.

From January to August, property prices have risen 15.8%. Over the last 12 months, dwelling values have increased by 18.4%.

This represents an increase of $103,400 over the last year, or $1,990 per week.

On the other hand, wage growth has 'plateaued', rising at an annualised rate of 1.7% and offset by an inflation figure of 3.8%.

CoreLogic's research director, Tim Lawless, said this disparity is making it harder for people buy property for the first time.

"Housing prices have risen almost 11 times faster than wages growth over the past year," Mr Lawless said.

"It’s likely the ongoing shortage of properties available for purchase is central to the upwards pressure on housing values."

Capital city house prices outpaced units but the gap is 'narrowing'

The first quarter of this year saw house prices rise 1.1 percentage points faster than units each month.

In August, this gap fell to 0.7 percentage points.

According to Mr Lawless, this could be another indicator that affordability is 'becoming more challenging'. 

August saw dwelling prices grew in every capital city except for Darwin which retracted 0.1%.

Canberra saw the largest increase of 2.2%.

Slightly behind Canberra was Brisbane with a 2% increase in dwelling values; Adelaide saw a rise of 1.9%; and Sydney prices rose 1.8% despite its ongoing lockdown.

Perth was not included because of a divergence in measurements.

Housesaugust.jpg

Source: CoreLogic

Rental growth softening but 'remains strong'

Rental prices have risen 8.2% over the past 12 months, which is the largest surge in 13 years.

There is a price growth disparity between houses and units for rent, as house rental price growth more than doubled unit prices in August.

Nationally, rental prices for houses increased 9.9% but only 4% for units. 

This difference is 'most pronounced' in Sydney and Melbourne, but most capital cities are seeing the same pattern.

Mr Lawless said this weaker trend is due to fewer temporary tenants from overseas, closed borders, and an unprecedented surge in inner city apartments. 

Gross rental yields have reached an 'all-time low' of 3.32%, with historic lows in Brisbane (3.99%); Hobart (4.01%); and Canberra (3.99%).

This is due to compression caused by house prices rising 18.4% while rents increased by 8.2%.

Rentalaugust.jpg

Source: CoreLogic


Advertisement

Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner occupiers.

Lender
Advertised rate Comparison rate Monthly repayment Rate TypeOffsetRedrawOngoing FeeUpfront FeesLVRLump Sum RepaymentAdditional RepaymentsPre-approval
VariableMore details
LIMITED TIME OFFER

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
LIMITED TIME OFFER

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
VariableMore details
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
VariableMore details
REFINANCE IN MINUTES, NOT WEEKS

Nano Home Loans Variable Owner Occupied, Principal and Interest (Refinance Only)

  • Refinance only. Fast online application
  • No Nano fees. Free 100% offset sub account
  • Mobile app, Visa debit card & instant payments
REFINANCE IN MINUTES, NOT WEEKS

Nano Home Loans Variable Owner Occupied, Principal and Interest (Refinance Only)

  • Refinance only. Fast online application
  • No Nano fees. Free 100% offset sub account
  • Mobile app, Visa debit card & instant payments
VariableMore details
YOU COULD WIN $100k TO PAY DOWN YOUR LOAN*

Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)

  • For a chance to win $100K towards your home loan, apply with Athena before Oct 31 & be approved by Dec 15
  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
YOU COULD WIN $100k TO PAY DOWN YOUR LOAN*

Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)

  • For a chance to win $100K towards your home loan, apply with Athena before Oct 31 & be approved by Dec 15
  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
VariableMore details
AN EASY ONLINE APPLICATION

Yard Home Loan (Principal and Interest) (Special) (LVR < 70%)

  • Unlimited additional repayments
  • Unlimited free redraws
  • Optional 100% offset can be added for $120 p.a.^
AN EASY ONLINE APPLICATION

Yard Home Loan (Principal and Interest) (Special) (LVR < 70%)

  • Unlimited additional repayments
  • Unlimited free redraws
  • Optional 100% offset can be added for $120 p.a.^

Rates correct as of October 23, 2021. View disclaimer.


Image by Pat Whelen on Unsplash

Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered which includes retail products from at least the big four banks, the top 10 customer-owned institutions and Australia’s larger non-banks:

  • The big four banks are: ANZ, CBA, NAB and Westpac
  • The top 10 customer-owned Institutions are the ten largest mutual banks, credit unions and building societies in Australia, ranked by assets under management in November 2020. They are (in descending order): Great Southern Bank, Newcastle Permanent, Heritage Bank, Peoples’ Choice Credit Union, Teachers Mutual Bank, Greater Bank, IMB Bank, Beyond Bank, Bank Australia and P&N Bank.
  • The larger non-bank lenders are those who (in 2020) has more than $9 billion in Australian funded loans and advances. These groups are: Resimac, Pepper, Liberty and Firstmac.
  • If you click on a product link and you are referred to a Product or Service Provider’s web page, it is highly likely that a commercial relationship exists between that Product or Service Provider and Savings.com.au

Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site.

In the interests of full disclosure, Savings.com.au, Performance Drive and Loans.com.au are part of the Firstmac Group. To read about how Savings.com.au manages potential conflicts of interest, along with how we get paid, please click through onto the web site links.

*Comparison rate is based on a loan of $150,000 over a term of 25 years. Please note the comparison rate only applies to the examples given. Different loan amounts and terms will result in different comparison rates. Costs such as redraw fees and costs savings, such as fee waivers, are not included in the comparison rate but may influence the cost of the loan.

Latest Articles

author-avatar
Rachel is a Finance Journalist, and joined Savings in 2021. Coming from a background in the FinTech space, her interests include the innovation of lending technology, property, investing, and more. With a passion for educating and informing people about their finances, she hopes to increase the financial literacy of everyday Australians.

Be Savings smart.
Subscribe for free money newsletters.

By subscribing you agree to the Savings Privacy Policy