Another month of convincing home price growth in Perth, Brisbane and Adelaide has been recorded as poor affordability keeps the two biggest capital city markets in check.
Dwelling values across the three smaller cities have been rising by about one per cent a month since May, based on analysis of CoreLogic’s home value index.
Nationally, home values lifted by 0.4 per cent in December, with prices up 8.1 per cent in the 2023 calendar year.
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The monthly growth was the smallest gain since the rally began in February, unwinding a downturn that began in 2022.
CoreLogic research director Tim Lawless said widening disparity across cities and regions was a defining trend of 2023.
“Such diversity across the capital cities can be broadly attributed to factors relating to demand and supply,” Lawless said.
He said affordability constraints in the Queensland, South Australian, Western Australian capitals were not as severe as in Melbourne and Sydney.
“And advertised supply levels have remained persistently and substantially below average,” he said.
In Melbourne and Sydney, dwelling growth has slowed sharply June, with both markets yet to return to record highs.
In the harbourside city, home prices lifted 0.2 per cent during December.
Melbourne values fell 0.3 per cent, marking a second month in decline.
For the three smallest capital cities, it was overall a softer year in residential property.
Hobart dwelling values were down 0.8 per cent over 12 months, Darwin was 0.1 per cent lower and the Australian Capital Territory recorded a soft 0.5 per cent increase.
Cities outperformed the regions last year as regional migration trends normalised after the pandemic drove demand for homes outside the major urban centres.
Nationally, Lawless said housing markets had lost momentum since the November interest rate hike.
“After monthly growth in home values peaked in May at 1.3 per cent, a rate hike in June and another in November, along with persistent cost of living pressures, worsening affordability challenges, rising advertised stock levels and low consumer sentiment, have progressively taken some heat out of the market through the second half of the year,” he said.