Can Aussie house prices continue to defy gravity?


Justin Fabo from Macquarie Group published the below chart last week on Twitter (X) showing that “housing prices appear to be rolling over in Canada and NZ (and possibly the UK)” But “growth in Australia is slowing but still solid”:

Global dwelling prices

CoreLogic’s daily dwelling values index continues to record around 0.8% monthly growth at the 5-city aggregate level, with minimal movement over recent months:

Monthly dwelling values

Australia’s house price rebound has defied gravity, given it coincided with a circa 30% decline in borrowing capacity before this month’s rate hike by the RBA:

borrowing capacity

The big question looking ahead is: Can Australian home values continue to defy gravity? Or will they follow the path of the other markets and roll over?


Over recent months, we have seen the nation’s auction clearance rate trend lower, which has historically been a strong leading indicator for price growth:

Auction clearances versus prices

The latest interest rate hike from the RBA appears to have taken some steam out of the market. And if the RBA follows-up with another rate hike in December or February, then it risks being the straw that broke buyers’ backs.


On the other hand, Australia’s population growth continues to go from strength to strength.

The latest data from the Department of Home Affairs showed that the number of temporary visa holders (excluding visitors) hit a record high 2.3 million people in September, which was an increase of nearly 600,000 people year-on-year:

Temporary visas on issue

In a similar vein, the latest labour force data from the ABS showed that the civilian population aged 15 years and over grew by a record 612,000 (2.9%) in the year to October:

Australian civilian population

This record population growth is the primary reason why both house prices and rents have risen so strongly.


Therefore, my guess is that Australian home value growth will merely slow rather than outright decline heading into 2024.

It is difficult to see how a “buyers’ market” will develop when the sheer number of buyers is growing so strongly.

About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.