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Home prices rise for fifth consecutive month as rebound gathers speed

By Mo Zeitouneh

Home prices across Australia have increased once again, with new data revealing the Reserve Bank’s decision to lift the cash rate in May did little to deter a property price rebound.

PropTrack’s latest Home Price Index for May has shown the national rise in prices already seen so far this year gathered pace in May, broadening and accelerating across markets.

According to the figures, national home prices rose for a fifth consecutive month in May, increasing 0.33%, bringing prices up 1.55% from the low point recorded in December last year.

“Home prices in the combined capital cities have risen 1.34% in the past three months, the strongest quarterly growth since the December quarter of 2021,” PropTrack senior economist Eleanor Creagh said.

“Supply constraints have eased slightly with respect to total stock for sale, but the flow of new listings remains soft.

“This is keeping a floor under prices, with sellers benefitting from less competition with other vendors.”

Market conditions have recovered following five consecutive months of price growth, driven by stronger housing demand relative to stock on market, Ms Creagh said.

“Auction activity has improved and clearance rates remain firm after rising above levels seen in the second half of 2022,” she said.

“This was a period when interest rates were rising rapidly and prices were falling in most markets.

“Although they are at, or close to peak levels, interest rates may still rise further and the economy is also expected to slow.”

Home prices grew in every capital city except Darwin, with Canberra and Perth recording the largest increases, with monthly growth of 0.65% and 0.64%, respectively.

Here’s how home prices around the country fared in May.


Sydney home prices have increased 2.94% this year, with prices rising for the sixth consecutive month in May – up a further 0.58% and 3.03% up from their low in November 2022.

“Sydney led the recent downturn and saw the largest correction, with home prices falling 7.19% from their February 2022 peak to the November 2022 low,” Ms Creagh said.

Sydney, the market which led the downturn, is also leading the recovery. Picture: Getty.

“Positive demand drivers stemming from the shortages in rental supply and strong rebound in net overseas migration have buoyed housing demand.”

Home prices in Sydney are “now down less than 2% from levels seen in the same period last year,” Ms Creagh said.


Home prices grew 0.22% – the city’s fastest monthly growth since February last year.

Prices were now up 0.38% from their low point in January 2023 after four consecutive months of gains.

“With the end of interest rate tightening in sight, much of the uncertainty buyers have experienced with respect to borrowing capacities and mortgage servicing costs is subsiding,” Ms Creagh said.

“Given the rebound in migration and tight rental markets, prices have been resilient to the reduction in borrowing capacities.”


Brisbane’s home prices have risen for five consecutive months after increasing 0.33% in May.

Ms Creagh said strong housing demand and constrained supply have offset the substantial deterioration in affordability from rising interest rates.

Home prices in Brisbane recorded monthly growth of 0.33% in May. Picture: Brendan Radke

“As the rebound has gathered pace, home prices in Brisbane are now up 1.99% this year and down only 1.50% from their peak in April 2022,” she said.


Home prices reached a new peak in May, rising 0.58% compared to April and 2.64% year-to-date.

“Adelaide maintains its top spot as the strongest performing capital city market over the past year, with home prices up 5.60%,” Ms Creagh said.

“The comparative affordability of the city’s homes has seen prices holding up better as interest rates have quickly risen.”


Home prices in Perth have grown 3.07% so far in 2023, with 0.64% of growth recorded in May making it the strongest performing capital city market year-to-date.

“Perth home prices bucked the falling price trend seen nationally for much of last year and have continued to climb this year,” Ms Creagh said.

Property prices in Perth are at their peak, with 4.21% annual growth. Picture: Getty.

“After Darwin, Perth is the cheapest capital city market in terms of dwelling values. The relative affordability of the city’s homes and tight supply has supported prices.”


Following several years of outperformance, Hobart recorded 13 consecutive months of price falls which continued into 2023.

Ms Creagh said housing market conditions improved this year, with rising auction clearance rates and stronger housing demand relative to stock on market.

“Hobart has now joined the national price rebound, lifting 0.07% in May,” she said.


Home prices in Canberra recorded the fastest monthly growth of all markets in May.

Prices rose 0.65%, which was the fastest pace of growth since March 2022.

Canberra was the strongest performing market in May, with monthly growth of 0.65%. Picture: Getty.

“With stronger market conditions, home prices in Canberra haven risen for three consecutive months and are up 1.00% from their low recorded in February 2023,” Ms Creagh said.


Home prices experienced a small 0.01% decline in May, taking them just 0.93% below their peak in May 2022.

Buyers out in force

Buyer interest and levels of enquiry has experienced a marked increase due to a combination of factors, LJ Hooker head of research Mathew Tiller said.

“You have those (buyers) out there that are maybe on the edge of where their mortgage repayments can be and they’re actually looking to downsize their mortgage, downsize their houses,” he said.

“But definitely there’s owner occupiers looking to upgrade that are really comfortable in their employment position.

“They’ve had increases in pay rises. So, they’re out there in the market, comfortable and confident that they that they can withstand any increase in interest rates.”

Buyer demand relative to supply remains strong. Picture: Adam Yip

David Walker, Ray White Upper North Shore principal, said stock levels were back to historical lows, sitting at 20 % less for sale.

“The lack of choice has meant that clearance rates remain high and the numbers of buyers coming through open homes are high,” he said.

“Prices seem to have stabilised and we are seeing homes that have sold 12-18 months ago being sold at similar, or higher levels than when they last transacted.

“Buyers are still active, cautious but active. People now are understanding they need to factor in interest rate rises so maybe not borrowing their maximum capacity but the activity level and buyers willing to transact has not ceased at all.”

Mr Walker said given that most people feel market conditions were starting to improve, and with stock levels starting to normalise, he expected the upcoming spring selling season to be busier than usual.


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