Chart of the week: House price growth turns negative
This week's chart of the week looks at how house price growth has turned negative for the first time since 2023.
This week's Chart of the Week comes from the Australian Equity Market Outlook: Q1 2025. This particular graph looks at house price growth through the CoreLogic Hedonic Home Value index. It illustrates that Sydney and Melbourne house prices have been on a strong upwards trajectory from the start of the graph in 1994, but has faltered recently and is slowing.
Our Market Strategist, Lochlan Halloway, believes that house prices are worth keeping an eye on in 2025. Rate hikes and unprecedented unaffordability are dampening property price growth, albeit modestly.
For the first time since early 2023, Sydney's monthly house price growth turned negative, off 0.5% between August and November 2024. In Melbourne, house prices have fallen a touch over 2% in the 12 months to November.
Of particular importance are potential spillover effects on household consumption, given the strong historical correlation between house prices and spending.
The equity research team provides an in-depth economic outlook, valuation overview and top picks going into 2025 in the Australian Equity Market Outlook, available to subscribers and trialists of Morningstar Investor.
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