The Australian property market is showing signs of a slowdown. With national dwelling values rising by just 0.4% in September, according to the latest CoreLogic data.

The Australian property market saw a 1% increase in the national home value index (HVI) marking the lowest quarterly rise since March 2023.

CoreLogic’s Research Director, Tim Lawless, said a significant increase in property listings was a key factor in the market’s deceleration.

“The rise in real estate inventory is a seasonal trend, with spring and early summer one of the busiest periods of the year for selling,” Mr Lawless said. 

The slowdown is particularly evident in Melbourne which is experiencing a 1.1% decline in dwelling values over the quarter. Canberra, Hobart, and Darwin also experienced falls. Sydney had a quarterly growth of only 0.5%, its lowest since February 2023.

Perth’s quarterly growth eased from 6.2% to 4.7% and Brisbane slowed to 2.7%.

Auction clearance rates have dropped to the low 60% range across the combined capital cities, and the increase in listings has led to softer market conditions for sellers. Properties are also taking longer to sell with the median time now up to 32 days nationally- up from 29 days in the June quarter.

Affordability constraints continue to drive stronger performance in lower-priced markets.

Lower quartile dwelling values in combined capitals have increased by 12.4% over the past year, compared to just 3.8% for upper quartile properties.

Looking ahead, Mr Lawless expects further growth in housing values, but at a slower pace and with increasing diversity across markets.

He said while factors such as improving sentiment, tight labour markets, and expectations of future interest rate cuts may support the market, persistent affordability challenges and potential tightening of credit conditions could act as headwinds in the coming months.