Home buyers and sellers in Australia are expressing confidence in the housing market, leading to a complete reversal of the rapid decline in house prices. According to PropTrack’s Home Price Index report, national prices have recovered to reach peak levels after climbing 0.38 percent in September and 4.31 percent this year from their 2022 lows. This increase in buyer and seller confidence is accompanied by a significant increase in choice in the major capitals, as noted by PropTrack senior economist Eleanor Creagh.
Creagh explains that home price growth is being driven by factors such as record levels of net overseas migration, tight rental markets, and a housing shortage. While the number of properties hitting the market in Sydney and Melbourne has been increasing, providing more options for buyers, strong demand continues to drive prices up.
In September, Sydney saw the highest growth in house prices, with a 0.48 percent increase last month and a 6.86 percent increase since the beginning of the year. The median house value in Sydney is now over $1 million, and demand remains high in areas near the CBD and north of the harbor bridge. Melbourne’s house prices also increased by a quarter of a percent in September, marking the first positive annual growth since 2022.
Brisbane’s market has been consistently growing for nine consecutive months, with a 0.39 percent increase in September, reaching a new record. Limited choice in Brisbane has resulted in strong competition and solid selling conditions, driving prices to new highs.
Despite rapid interest rate hikes, Adelaide’s relatively affordable prices and limited stock have led to intense competition. The city’s market grew by almost half a percent last month and more than eight percent overall, making it one of the country’s top-performing markets.
In September, Perth experienced the most significant gains in house prices, rising by 0.71 percent. However, it remains one of the most affordable cities to buy a home compared to other major capitals. On the other hand, Darwin is the only major capital city to see a decline in house prices, dropping 0.01 percent in September and 1.64 percent this year. This is attributed to the fact that Darwin did not experience a significant downturn like other cities.
With interest rates likely to have peaked and population growth continuing while new homes remain scarce, it is expected that prices will continue to rise. Ms. Creagh predicts that as spring progresses, more markets are likely to surpass the fast falls experienced in 2022 and set new peaks.