Home prices across Australia have climbed to new heights yet again, delivering an early Christmas present to homeowners and defying last month’s interest rate hike.
The national median home value climbed a further 0.22% in November to a new record high according to the latest PropTrack Home Price Index, although the pace of growth slowed as more properties hit the market.
Property prices reached new peaks in Sydney, Brisbane, Adelaide and Perth, in addition to regional areas across Queensland, South Australia and Western Australia.
PropTrack senior economist Eleanor Creagh said while the flow of new listings has risen, demand for housing has kept pace.
“Strong housing demand, buoyed by record net overseas migration, tight rental markets, low unemployment and home equity gains, has worked alongside limited housing stock to offset the impacts of higher interest rates this year,” Ms Creagh said.
All of the capitals except for Darwin recorded price rises last month, led by Perth where home prices increased 0.74% month-on-month.
Sydney is at the forefront of Australia’s housing market resurgence, not only recouping the losses seen in 2022, but surpassing its previous peak in February 2022 by 1%.
Prices dropped 6.8% from February to November 2022, but have since increased for 12 straight months, growing 8.4% from the November 2022 low.
Bresic Whitney chief executive Thomas McGlynn said the Sydney market was quite resilient despite the uncertainty surrounding interest rates.
“Even though we have seen more properties come to market this year, especially in the back end of this year, it still hasn’t been enough to keep up with buyer demand,” he said.
“I think it has largely been the availability of properties that has driven these increases across the year.”
Home prices in Sydney have grown 8.4% over the past year. Picture: realestate.com.au
However, Mr McGlynn said they were starting to see buyers show a little more caution.
“Prices are still really fair. Even though buyers are being a little more cautious with the way that they are proceeding with their negotiations, they still want to secure great properties,” he said.
Melbourne’s housing market saw a slight increase, with home prices rising by a modest 0.04% in November and up just 1.39% over the past 12 months.
Despite this growth, Melbourne’s property market remains 3.71% below its peak in March 2022, trailing behind the price recoveries seen in Sydney and other cities.
Melbourne home prices has grown 1.39% to a median value of $807,000 over the past year. Picture: realestate.com.au
Since bottoming in January 2023, Melbourne’s home prices have climbed by 1.92%, placing Melbourne ahead of Hobart in terms of recovery pace, indicating a gradual but steady improvement in the city’s real estate sector.
Brisbane home prices have recovered from last year’s price falls, with home prices edging 0.20% higher in November to reach a new peak.
Prices are now 8.85% higher than a year ago and up 8.91% year-to-date.
Harcourts Queensland chief executive Mitch Peereboom said Brisbane offers a sought-after lifestyle for a variety of people.
“We have seen less listings on the market over the past 12 months, so there has been less choice,” he said.
Brisbane median home price now sits at $775,000. Picture: realestate.com.au
“But there has still been strong buyer interest wanting to capture the lifestyle in Brisbane, which has resulted in more competition and has obviously increased sale prices as a result.”
Mr Peereboom said sellers were listing their homes for sale with a lot of confidence because they know ready buyers are looking in Brisbane.
Perth has been the strongest market in the country in terms of annual growth, up 12.76% from a year ago.
Home prices rose 0.74% in November — the 17th consecutive month of growth — to hit a new peak.
Perth home prices have soared 12.76% over the past year. Picture: realestate.com.au
Ben Keevers, principal of the Ray White Keevers Group in Perth’s North Beach area, said the city’s lifestyle, relative affordability and tight rental markets were supporting home values.
“Perth still represents really good value compared to the other capital cities around Australia,” he said.
“I think there’s still a lot of value upside in Perth, particularly compared to the east coast.”
In November, Adelaide experienced a monthly increase of 0.34% in home prices, also reaching a new high.
Adelaide stands out as a leading city in the country’s real estate market, with an annual increase of 9.74% in home prices.
The city’s relatively affordable housing market has remained resilient against interest rate hikes, contributing to its strong performance.
Additionally, the limited availability of housing stock in Adelaide has fuelled competition.
Canberra home prices increased 0.32% month-on-month to sit 0.97% above levels seen in November last year.
Prices in Canberra remain 4.49% below their March 2022 peak despite having recovered 2.35% since hitting their trough in February 2023.
Hobart saw home prices edge 0.03% higher last month. Home prices declined 2.92% in Hobart over the past 12 months, however it comes after several years of outperformance, as well as strong growth during the pandemic.
Home prices in Hobart have risen 37.93% since March 2020 despite a price fall over the past year. Picture: realestate.com.au
For context, Hobart home prices have soared 37.93% since March 2020.
In Darwin, home prices fell by 0.12% in November and have fallen 1.75% over the past year.
Darwin hasn’t seen a recovery in prices in 2023 but hadn’t seen as large a downturn in 2022. Darwin home prices in November were still 24.9% higher than in March 2020.
Despite interest rates climbing again in November and the flow of listings hitting the market increasing, Ms Creagh said housing demand had remained strong and national prices have now risen for 11 straight months.
“Meanwhile, the sharp rise in construction costs and labour and materials shortages have slowed the delivery of new builds, hampering the supply of new housing,” she said.
“Looking ahead, price growth is expected to continue as the positive tailwinds for housing demand and a slowdown in the completion of new homes counter the sharp deterioration in affordability and slowing economy.
“However, prices are likely to lift at a slower pace than they have across 2023.”