After ten straight monthly falls, which just so happens to have coincided with ten consecutive increases by the Reserve Bank to the official cash rate, dwelling values were higher across the four largest capital cities and most of the broad ‘rest-of-state’ regions, led by a 1.4% gain in Sydney.

In what is sure to be music to the ears of homeowners and investors, CoreLogic’s national Home Value Index (HVI) posted the first month-on-month rise since April 2022, up 0.6% in March. The RBA started increasing the cash rate in May 2022 and has not taken its foot off the monetary policy pedal since.

Executive Chairman Raine & Horne Angus Raine said that after ten straight months of falls, he was delighted that the worm appeared to be turning for real estate. 

“Property owners have been forced to do most of the heavy lifting in the fight against inflation. It’s time for the Reserve Bank to give property owners with a mortgage a breather,” Mr Raine said. 

Angus believes the increase has plenty to do with low stock levels across the county. The latest Raine & Horne Monthly Data Report supports this belief showing that listings across Australia were currently 10% lower than in January. 

“Besides the combination of capital growth and a shortage of listings, there has been a surge in buyer demand. This news is fantastic for vendors considering an autumn sale,” Angus said. 

According to Raine & Horne, between January and February 2023, the number of groups attending open-for-inspections (OFIs) increased by 15%. 

“This result is fantastic news for autumn real estate markets, as buyer activity in February is a bellwether for sales in April and May,” Angus said. 

CoreLogic’s Research Director, Tim Lawless, attributed the rise in values in March to a combination of low advertised stock levels, extremely tight rental conditions, and additional demand from overseas migration.

“With rental markets this tight, it’s likely we are seeing some spill over from renting into purchasing, although, with mortgage rates so high, not everyone who wants to buy will be able to qualify for a loan. Similarly, with net overseas migration at record levels and rising, there is a chance more permanent or long-term migrants who can afford to, will skip the rental phase and fast-track a home purchase simply because they can’t find rental accommodation.”

Drilling down into the numbers, the lift in housing values has been most evident across the upper quartile of Sydney’s housing market. House values within the most expensive quarter of Sydney’s market were up 2.0% in March, and the upper quartile of the Sydney unit market was 1.4% higher over the month.

Angus said, “The premium markets in Sydney and Melbourne typically lead the price cycles, so the increase in house values in these areas tells us where we are and where we are headed.

“Also, in the premium markets, higher interest rates are often less of a factor when buying and selling real estate. The more significant issue is stock levels, which are below historical averages.

“The combination of improving values, more demand and a shortage of listings provide those vendors considering a sale before winter with plenty of food for thought. We just need the RBA board to lay off for a bit. 

“Regardless of what the RBA does tomorrow, it’s great to see that property is back front and centre in the thoughts of Australians. The resilience of our property once again shows why bricks and mortar is Australia’s favourite asset class.”