Property price rebound losing momentum, with Sydney growth halving

Australian property prices are increasing at a slower pace, CoreLogic found. (Source: Getty)

Aussie home prices have increased for the fifth consecutive month, but the pace of growth is losing its momentum.

CoreLogic’s Home Value Index rose 0.7 per cent in July, slowing from 1.2 per cent in May. Canberra was the only capital city to record a decline in values, down 0.1 per cent, while Hobart was unchanged.

Nationally, property prices were still 5.3 per cent below peak levels, which were reached in April 2022. The median value of a property in Australia is now $728,831.

• Also read: Property pulse: What you can buy in Australia for $1 million this week

• Also read: Property prices rebound: Top 10 Aussie suburbs leading the charge

• Also read: Top 66 ‘affordable’ Aussie city suburbs to buy property

Sydney growth halves

CoreLogic research director Tim Lawless said the most substantial reduction in growth occurred in Sydney, where the median value was now $1,082,129.

“After leading the upswing, the monthly pace of growth in Sydney housing values has halved from a recent high of 1.8 per cent in May to 0.9 per cent in July,” Lawless said.

“Sydney has also seen a significant rise in the number of fresh listings added to the market, 9.9 per cent higher than the same time last year and 18 per cent above the previous five-year average.

“An increased flow of new listings provides more choice and may be working to reduce some of the urgency felt among prospective buyers.”

Brisbane and Adelaide lead the pace of gains across the capitals, with house values up 1.4 per cent across both cities to $735,394 and $671,755 respectively.

Although new listings have increased in the cities, Lawless said the number remained well below levels from a year ago and the previous five-year average.

Melbourne prices increased 0.3 per cent to $766,912, Perth prices were up 1 per cent to $598,074, while Darwin was up 0.3 per cent to $448,363.

Premium property driving the slowdown

The slowdown has mostly been driven by an easing in gains across the more expensive end of the property market, with the lower and middle market remaining resilient in July.

“Some resilience in growth across the middle and more affordable end of the market aligns with housing-finance data, which has shown a stronger bounce-back in the value of lending to first-home buyers and investors over recent months,” Lawless said.

“These segments tend to be more active across the middle to lower end of the pricing range, where competition to purchase a home may be more intense.

“Premium housing markets tend to lead the cycles, so the slowdown in the pace of growth could be a sign of a broader easing in the pace of growth over the coming months.”

Follow Yahoo Finance on Facebook, LinkedIn, Instagram and Twitter, and subscribe to our free daily newsletter.