While November continued to deliver monthly gains in home values reflecting persistent demand and low stock across many markets, underlying affordability pressures and tightening credit conditions remind us that momentum may be under subtle strain in Sydney and Melbourne. According to Cotality (formerly CoreLogic), national median dwelling values rose by 1.0% for the month, lifting the quarterly growth rate to 3.1% and the annual change to 7.5%. The combined capitals index mirrored this result, also posting 1.0% monthly growth, with capital city values up 3.1% over the quarter and 7.1% over the year. Perth remains one of the strongest performing capital cities in the country, with median dwelling values rising 2.4% in November, taking three-month growth to 7.4% and annual gains to 13.1%, underscoring the impact of deep buyer demand meeting continued low supply.

According to REIWA, available listings across the Perth metro area ticked up by 1.7% in November, taking total stock to 2,918 properties. Despite the small monthly rise, this remains around 48% lower than the same time last year, keeping competition for quality homes intense. Sales activity also lifted, with total weekly sales up 2.1% over the month to 937 transactions and only marginally (0.5%) above the same time last year. The sales-to-stock ratio for Perth sits at approximately 24%, a clear indicator of a fast-moving market. The 12mth rolling median Perth house price increased a further 0.6% to November to $825,000, marking yet another record high. In the rental market, median house rents held steady at $700 per week, while median unit rents rose 3.1% to $670 per week.

Within the City of Melville, the REIWA median monthly house Price eased slightly by 0.4% to $1,420,000, though it remains up around 11.1% over the year, reflecting solid medium-term growth despite minor month-to-month fluctuations. November recorded 143 property sales against 170 new house listings, with a City of Melville sales-to-stock ratio of approximately 46% and a median of just 9 days on market signalling that well-priced, well-presented homes are still being absorbed very quickly. Across our core local suburbs, total available listings lifted to 148 properties at the end of November, up around 17.5% month-on-month but still approximately 26.7% below levels seen a year ago. Notable increases in stock were recorded in Attadale, Bicton and Ardross, while tightly held pockets such as Alfred Cove and Myaree continue to offer very limited choice for buyers.

Looking ahead, the structural constraints highlighted by Cotality of record-high dwelling value to household income ratios, a stretched cost-to-income burden for renters and buyers alike, and the likelihood of interest rates remaining on hold, suggest the housing market in some parts of the nation is entering a more cautious phase. It should also be noted that Australian Household Debt is currently at record levels, and the Household Debt to GDP Ratio is currently well above the levels that lead to the GFC back in 2008 – this is a very precarious set of circumstances especially when paired with the recent Government backed 5% deposit home loans. If property prices were to drop by around 10-15% many of these 5% deposit scheme, buyers will be in negative equity – if a large cohort where to lose their jobs, distressed sales would be a likely outcome which could have a cascading effect on the property industry and local economies. Many don’t consider that when Government intervenes with schemes similar to this which are claimed to improve affordability and accessibility to housing, they actually have the opposite effect and inflate property prices. This has been the outcome just about every single time in history and is generally followed by a significant price correction (to the downside). This should be watched closely. ]

In the meantime, undersupply and buyer demand in precincts like Perth and the City of Melville will likely continue to fuel upward pressure on prices in the near term albeit at increasingly slowing rates. For vendors, well-priced, well-presented properties will likely continue to perform strongly; for buyers, being finance-ready and decisive is vital to secure the right home.