Adelaide Set to Surpass Melbourne in Home Prices Amid National Real Estate Shifts
Adelaide’s real estate market is on the brink of surpassing Melbourne in terms of home values, as prices in the Victorian capital continue a downward trend. This shift comes amidst a broader national trend of fluctuating property markets across Australia. According to the latest report by PropTrack, while Melbourne saw a decline of 0.21% in July, Adelaide experienced a rise of 0.58% in the same period.
Stephanie Convery reported that Melbourne’s housing market has depreciated by 4.4% from its peak in 2022, contrasting sharply with the significant growth in other cities like Perth, Brisbane, Sydney, and Canberra. “Melbourne homes are now worth 4.4% less than they were at their peak last year, showing a continued trend of decline,” Convery notes, reflecting on the increasing supply and construction rates contributing to this slump.
In contrast, Adelaide’s property values have risen by 14.81% over the year, with the median home price now at $770,000. PropTrack’s senior economist Paul Ryan highlighted the city’s growth, saying, “The relative affordability across the city has made Adelaide the strongest performing market since the onset of the pandemic. But ongoing price growth means values may eclipse Melbourne over the coming year.”
The disparities in market dynamics are echoed in the findings from CoreLogic’s quarterly home value index, which points to a deceleration in market momentum and increasing diversity in conditions. Tim Lawless from CoreLogic elaborated, “The number of homes for sale in Brisbane, Adelaide, and Perth is more than 30% below average for this time of the year, while weaker markets like Melbourne and Hobart are recording advertised supply well above average levels.”
This trend is influencing buyer behavior, with a noted pivot towards lower-cost dwellings due to reduced borrowing capacity and affordability issues. “With stretched housing affordability, lower borrowing capacity and a lift in both investor and first-home buyer activity, it’s not surprising to see the unit sector outperforming for a change,” Lawless explained.
The national perspective reveals a complex picture. Despite the local variances, PropTrack reported a 6.3% increase in home prices nationally compared to last year, with a marginal overall increase of 0.08% in July. The Australian Bureau of Statistics further underscored the impact of economic factors on the housing sector, citing high interest rates and rising labor and material costs as critical influences behind the lowest housing approvals in 12 years.
As the market continues to evolve, the shifting dynamics between Adelaide and Melbourne highlight broader trends affecting the Australian real estate landscape, with potential long-term implications for homeowners and investors alike.
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