Australian Property Market Experiences Robust Recovery: Record Highs in Multiple Cities

The Australian property market is witnessing a significant recovery, as property prices continue to rise for the sixth consecutive month, with growing confidence among buyers and sellers across the nation.

According to research from CoreLogic, the Home Value Index (HVI) saw an increase of 0.8% in August, marking a consistent upward trend for the past six months. Richard Wood, in his report, mentioned that the national HVI has surged by 4.9% since its low in February, thereby adding approximately $34,301 to the median home price. Tim Lawless, CoreLogic’s research director, noted, “Sydney has led the recovery trend to-date with a gain of 8.8 per cent since values found a floor in January this year.”

In a separate report by Daniel Butkovich, the PropTrack Home Price Index indicated a growth of 0.28% in national home values for August. Notably, prices have reached record highs in cities like Brisbane, Adelaide, and Perth, primarily driven by a limited availability of homes on the market. Eleanor Creagh, PropTrack’s senior economist, observed, “For much of this year, stronger housing demand and a limited flow of new listings hitting the market have offset the impact of interest rate rises.” She further added, “Sydney continues to drive Australia’s home price recovery after leading the downturn in 2022.”

Here are some key insights from the reports:

Sydney: Home prices in Sydney have been on an upward trajectory for nine straight months, with a 5% increase over the past year. The city’s median value is just 1.29% short of its record high.

Brisbane: Experiencing unprecedented growth, Brisbane’s median house price now stands at $844,000, reflecting a nearly 5.5% rise this year alone.

Perth: In the past year, Perth has emerged as Australia’s top-performing capital city market, with home prices surging by about 7.5% to a new record high.

Adelaide: The city has experienced the fastest growth among all capitals in August, with a 0.64% increase. Over the past year, prices have surged by 7.41%, making it the second-fastest growing capital after Perth.

While the property market is certainly buoyant, there are underlying concerns. Even though signs indicate that cost-of-living pressures are easing and the risk of future interest rate hikes has “subsided”, many households might face mortgage stress due to previously high interest rates.

However, with stabilizing interest rates and the market brimming with confidence, the pace of home price growth might experience a slowdown as more listings become available in spring. As Eleanor Creagh suggests, “However, with interest rates stabilized and likely near or at their peak, the confidence in the market is likely to sustain, resulting in more of the country returning to positive annual price growth.”

References:

“Recovery in property prices quickens, with sixth consecutive monthly rise” by Richard Wood. ↩ https://www.9news.com.au/national/property-prices-in-australia-continue-to-rise-corelogic-data/8295ccb9-3dd7-45b7-bbd5-d584d16d098f 

“Where property prices have reached record highs” by Daniel Butkovich. ↩ https://www.realestate.com.au/news/where-property-prices-have-reached-record-highs/