Where property prices have reached record highs

The latest PropTrack Home Price Index shows property values notched up another month of growth in August, with home values rising 0.28% at the national level.

After rising for eight straight months, Australia’s median home value is now just below its previous peak, with prices in some cities already hitting new highs.

Values rose in all parts of the country in August, except Darwin and regional Victoria, Tasmania and Western Australia, which recorded small declines. 

Prices are now at record highs in Brisbane, Adelaide, and Perth amid a shortage of homes on the market. Home values in regional Queensland and South Australia are also higher than ever before.

"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," said PropTrack senior economist Eleanor Creagh.

"National home prices have now regained the majority of the price falls from 2022."

Significant momentum is building in Australia’s biggest property markets, with home prices nationally having risen about 3.5% so far this year, despite 12 interest rate rises since mid-2022 reducing buyers’ borrowing capacities. 

The Reserve Bank of Australia hasn’t hiked rates since June, with the pause giving buyers and sellers more confidence to transact.

Rising prices and stabilising interest rates triggered an unseasonable increase in listing volumes in July with more vendors than usual putting properties up for sale ahead of the usual spring rush. 

"In Sydney and Melbourne, the flow of new listings is increasing as seller confidence improves," Ms Creagh said. 

"However, buyer demand still far outsrips supply, putting upward pressure on prices"

Sydney home prices have risen for nine consecutive months, increasing by 5% in the past year. Melbourne’s price recovery has been slower, although it is still ahead of Canberra and Hobart.

"As more new listings come to market over spring we may see the pace of home price growth start to slow," Ms Creagh said.

"However, with interest rates stabilised 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."

How home prices changed around the country in August

Sydney

Property prices in Sydney rose 0.47% in August, taking the city’s median value to just 1.29% below the record high.

"Sydney continues to drive Australia’s home price recovery after leading the downturn in 2022," Ms Creagh said.

Almost every Sydney region recorded price gains, but the North Sydney and Hornsby region was the standout performer this month. House prices there rose just over 1% in August and are now more than 9% higher than a year ago.

Houses continue to outpace units, with the city and inner south, Baulkham Hills and Hawkesbury, inner south west and eastern suburbs regions also posting strong growth.

However, unit prices in Sydney’s eastern suburbs grew faster than anywhere else in the country in August, rising about 1.7%.

Home values in Sydney's eastern suburbs continue to grow, particularly for units. Picture: Getty

---

"A lot of people who were thinking of spending higher are reducing their budget because of the reduction on how much they can actually borrow," said Alexander Phillips of PPD Real Estate.

"They’re being squeezed down, which is making the $800,000 to $1.5 million range more buoyant."

Melbourne

Prices rose a modest 0.15% in Melbourne in August, with values rising in some areas and falling slightly or remaining flat in others.

While values in Melbourne have risen by about 1.3% since the low point recorded in January this year, prices are still about 4.5% below the peak recorded in March 2022.

House prices increased the most in Melbourne’s north west, by about 1%, while unit prices in inner Melbourne rose almost 1.5% in August, and are now slightly higher than a year ago.

Units in inner Melbourne grew in value faster than the rest of the city in August, underpinned by investor demand amid a tight rental market. Picture: Getty

---

Suburbs in inner Melbourne have also recorded some of Australia’s strongest rental price growth over the past year, particularly for units, with demand increasing in convenient capital city locations as Australia’s population grows.

"There has been increased demand from parents buying for children, because rents have gone up and there’s less stock on the market for rentals," said Core Realty managing director Corene Chan.

"There’s an increased number of investors looking too. In the past few days, everyone calling me about apartments is looking for small one-bedroom apartments. They’re cash buyers looking for investments."

"Demand is much higher for all classes of apartments, however luxury apartments that are built well tend to fetch better prices."

Brisbane

Homes in Brisbane have never been more expensive, with values rising almost 5.5% so far this year after a 0.27% increase in August.

A median-priced Brisbane house now costs $844,000, while the unit median has grown to $561,000. 

Growth has been strongest in Brisbane’s southern and western suburbs in the past year. Values have risen by about 6 to 7% in the Brisbane - South, Logan - Beaudesert and Ipswich regions.

Real estate agent Rebecca Cuderman of Ray White Marsden said the relative affordability of the area was driving growth.

"At the end of the day, value for money is a huge thing," she said. "Across Logan generally, you can pick up an entry-level home in the $500,000 to $600,000 range."

"Interest rates have hurt a lot of people, but some people still seem to be finding money to spend on homes."

Meanwhile, units have outperformed houses in most Brisbane regions over the past year, with a limited supply of properties hitting the market keeping prices elevated.

Perth

Perth has been Australia’s strongest performing capital city market over the past year, with home prices increasing by about 7.5% to a new record high.

Despite strong growth, Perth is still Australia’s second cheapest capital after Darwin. The median house price in Perth is $638,000, while the median unit price is $441,000.

"The relative affordability of the city’s homes and limited choice for buyers have supported prices," Ms Creagh said.

House prices in the Mandurah region to the south of Perth have grown faster than anywhere else in Australia, rising 11.36% in the past year after a further 1.14% increase in August.

Real estate agent Vanessa Bekins of Acton Belle Property Mandurah said the strongest demand from buyers looking in the area was for properties under $650,000.

House prices in Mandurah have grown faster than anywhere in Australia over the past year, yet properties are still relatively affordable. This four-bedroom home sold for $552,500 in August. Picture: realestate.com.au/sold

---

"At the moment you’ve got all the different buyers competing – the downsizers, first-home buyers, those who are upgrading from a basic property," she said. "Then you’ve got the investors from over east."

Ms Bekins estimates about 30 per cent of properties sold in the area were purchased by east coast investors or people moving from interstate.

"After Covid, people are looking for a lifestyle change," she said. "They want to slow down and enjoy life with the kids on the weekend, maybe with a bit of land. I think there’s still growth to be had."

Adelaide

Home prices in Adelaide rose faster than any other capital, increasing 0.64% in August.

"The comparative affordability of the city’s homes has seen prices holding up better amid rapid interest rate rises," said Ms Creagh.

Over the past year, prices increased 7.41%, making it the second-fastest growing capital after Perth.

Adelaide’s median house price is now $727,000, while a median-priced unit is worth $516,000.

Home prices in Adelaide, particularly in the northern suburbs, have grown consistently over the past year, taking the city's median value to a new high. Picture: Getty

---

Prices in Adelaide's north have increased more than 11% over the past year, making it one of Australia's best performing local markets.

Meanwhile, prices in regional South Australia have reached a record high after rising about 10.5% over the past year.

Canberra

After a 0.14% increase in August, home values in Canberra are still down about 2% over the past year, and almost 6% since the March 2022 peak.

Units have held up a little better than houses, with values now 0.66% higher than this time last year. 

Hobart

Hobart’s median home price rose 0.27% in August to $676,000, however prices are still about 6.5% below the peak.

While Hobart remains the weakest capital city market in terms of annual growth, it’s still one of the best performing capitals over the past few years. 

When comparing annual price growth and change from peak, Hobart remained the weakest performing market in August. Picture: Getty

---

Home prices increased significantly during the pandemic, as well as the years prior, and values are up almost 39% since March 2020.

Darwin

Darwin was the only capital city where prices fell in August, with the median home value falling a further 0.38%. Prices in Darwin have come down 1.44% over the past year.

Darwin’s median house price is now $564,000 and the median apartment price is $390,000.

While prices in other capitals have recovered since the downturn triggered by rising interest rates, home values in Darwin are yet to start climbing again. However, Darwin’s downturn wasn’t as large as the other capitals.

Originally published at: https://www.realestate.com.au/news/where-property-prices-have-reached-record-highs/