The extraordinary rebound in Australian house prices rolled on this week, with values rising another 0.23% at the 5-city aggregate level in the week ended 23 March:
It was the strongest weekly rise since January 2022.
The rebound was broad-based, with all five major capital city markets recording value increases over the week:
So far in March, home values have risen by 0.53% at the 5-city aggregate level, driven by a 0.89% increase across Sydney:
In fact, since CoreLogic’s daily dwelling values index bottomed on 7 February, values have risen 0.7% at the 5-city level, with Sydney values soaring 1.3%.
This strong rebound in values has reduced the quarterly decline to just 0.9% at the 5-city level, with Sydney (-0.4%) only a few weeks away from moving into positive territory, assuming the rebound continues:
Home values are now down 9.4% from their peak at the 5-city level, led by the three largest capital cities:
Finally, the next chart plots the time series across those three main markets and the 5-city aggregate level. It shows the extent to which Sydney has driven the rebound:
The remarkable thing about this recovery is that it has arrived despite a 0.25% interest rate hike from the Reserve Bank in early February, and another 0.25% rise in early March.
These interest rate hikes have further reduced borrowing capacity, and should logically have pushed house prices lower.
Yet, the lack of listings, soaring rents, and record immigration have outweighed these rate rises, resulting in the current rebound.
Whether we have truly passed the bottom of the house price cycle remains to be seen and we will only know in hindsight.
But it is certainly looking like it.
