Australia’s Red Hot Housing Market Is Showing Signs of Cooling

(Bloomberg) --

Australia's booming housing market is showing signs of slowing, even as it wrapped up its best fiscal year since 2004.

Home values rose 13.5% in the 12 months to June 30, according to data released by CoreLogic Inc. Thursday. But, in June, growth cooled in every capital city but one, with national house prices climbing 1.9%, according to the data. That's slower than the prior month and less than the 2.8% surge seen at the recent peak in March.

High-end properties that had helped fuel a post-pandemic recovery were softer, the data showed. “This easing in the pace of growth at the top end of the market is another clear sign of a shift in momentum,” according to Eliza Owen, head of research for Australia at CoreLogic.

“The rest of the market tends to follow movements at the high end, and this is the first time in nine months that the high-tier growth rate has not accelerated,” Owen said in a research note Thursday.

With about half of the nation in lockdown, selling conditions are expected to be tougher this month. Still, rising interest rates and lack of affordability remain the biggest challenges for the market, she said.

In the rental market, values increased 6.6% in the year to June -- the biggest annual appreciation in rents since 2009.

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