Australia Home Prices: The Latest
Thinking of entering the real estate ladder? Current home buyers are up for a challenge as Australia’s home prices have reached record levels, especially in several capital cities.
The latest data is from the PropTrack Property Market Outlook August 2023 Report, which outlines residential property forecasts for the year ahead. Numbers suggest that property prices will increase by 5% by the end of 2023, with the costs to be felt more significantly in larger capital cities.
Major Cities Expected to Raise Home Prices
National home prices soared to record levels, and this has been attributed mainly to the stiff competition of homebuyers in a very limited supply. Even with higher interest rates for home loans, Aussies are keen to buy a home and have not dampened the demand (and price) for housing.
Cameron Kushner, PropTrack director of economic research, notes that “We saw price increases despite rising interest rates and reduced borrowing capacities and anticipate moderate price increases to continue over the coming months.”
Which cities should one expect higher prices? Data analysis indicates that all capital cities will have price growth over the remainder of the year, apart from Hobart and Darwin.
Perth Highest in Price Growth
Among the major cities, Perth is projected to have the highest price growth between 4% to 7%, now at a median price of $604,000. As much as 98.1% of home and unit markets in the city rose in value in a span of three months. The city is expected to reap the biggest home value growth nationwide.
This growth is followed by Sydney and Adelaide at around 3% to 6%, albeit each has vastly different median prices. Sydney homes are already at $1,070,000, and Adelaide is at $697,000.
Brisbane’s forecast is slightly lower at 1% to 4% at median rates of $773,000, while Melbourne and Canberra are likely to report lower growth compared to other cities.
Home prices are impacted by supply and demand. As listings have only started their uptick, homebuyers have been limited to limited stock. In fact, across capital cities, the volume of total property listings are at historical lows.
Some Cities Are Flat or Report Decline
While most capitals project price growth, the housing market in Canberra, Hobart, and Darwin remained still price-wise or even experienced price declines.
Canberra’s unit market is particularly down, as suburbs like O’Connor reported negative growth at 4.1%.
Hobart and Darwin both saw quarterly declines based on surveys. Declines across Hobart’s property prices showed a 3.2% fall across the likes of Sandford.
The Takeaway
Home prices in Australia are best described as multi-speed, with certain areas accelerating in home value while others remain flat or decline. Data forecasts note that cities like Perth, Sydney, and Adelaide will increase prices due to inventory levels being quite low and demand going strong.
Experts predict that price growth in capital cities may be short-lived, especially since a revival in new listings could balance seller competition and put a brake on the pace of price increases.
Need to buy a home? Chat with our home loan professionals about your options. We work with clients all over Australia, so get in touch today to get started.
