This was followed by the inner suburbs of Marrickville, Sydenham and Petersham, where dwelling values grew 15.3 per cent and the median home value is now $1,741,931.
Melbourne’s strongest growth was in its north-east, with home values around Darebin council’s northern suburbs, such as Reservoir and Preston, growing 7.9 per cent to a median price of $762,619 and those around Banyule council’s suburbs (such as Greensborough, Lower Plenty and Ivanhoe) growing 7.7 per cent to a median price of $935,214.
The CoreLogic report said slower growth towards the end of 2023 suggested home values might not climb as swiftly this year, but it would depend on Reserve Bank decisions.
“In the first half of 2024, dwelling value growth will be tested by the interaction of high interest rates and weaker economic conditions, both of which are likely to weigh on housing activity. This was already evident toward the end of 2023,” the report said.
“The trajectory of interest rates through 2024 will be a key factor influencing housing trends. Although another cash rate hike can’t be completely ruled out, the trend towards lower inflation, weakening economic conditions amid low consumption, and a loosening labour market suggests another rate hike is looking increasingly unlikely.
“A reduction in the cash rate target through 2024 could help to re-stoke demand later in the year.”
The Reserve Bank, which next meets on February 6, considers the CoreLogic data in its decision-making.
Home values nationwide grew just 0.4 per cent in December, marking a soft end to the year when compared to the peak monthly growth rate of 1.3 per cent in May.
CoreLogic research director Tim Lawless said December had recorded the smallest monthly gain since house prices started rising in February 2003.
“A rate hike in June and another in November, along with persistent cost-of-living pressures, worsening affordability challenges, rising advertised stock levels and low consumer sentiment, have progressively taken some heat out of the market through the second half of the year,” he said.
But that effect was unevenly spread across the country. Home values in Perth, Adelaide and Brisbane have been rising more than 1 per cent each month since May 2023.
“Such diversity across the capital cities can be broadly attributed to factors relating to demand and supply,” Lawless said.
“In Perth, Adelaide and Brisbane, housing affordability challenges haven’t been as pressing relative to the larger cities, and advertised supply levels have remained persistently and substantially below average.”
Meanwhile, regional areas experienced slower growth, with home values increasing 4.4 per cent compared to the combined capital city growth rate of 9.3 per cent.
“Stronger conditions across capital city markets is a reversal of the early COVID trend, which saw regional markets experience higher demand amid strong internal migration,” Lawless said.
“Regional migration trends have mostly normalised through 2023, and the significant capital gains recorded through 2020 to 2022 has meant many regional markets have become less affordable.”