Australian home prices hit a new record
The latest figures show that home prices climbed to a fresh peak in May 2024, with the month recording a 0.3 per cent increase nationally.
Subsequently, national prices are now 6.68 per cent above the levels seen in May 2023 and a substantial 9.58 per cent higher than their recent low seen in December 2022.
Looking at the capitals alone, prices across the combined major cities rose 0.41 per cent in May, putting them 7.22 per cent higher than this time last year. Hobart and Canberra were the only capitals to see prices fall back during the month, recording moves of -0.13 per cent and -0.21 per cent, respectively.
In all other capital cities, price growth has slowed since the rapid pace seen at the end of summer, with Perth the strongest, at 0.73 per cent, Brisbane next in line with 0.67 per cent, and Adelaide recording 0.53 per cent growth in May. These are also the three markers where annual growth is strongest. Perth prices are up 20.58 per cent year over year, while Adelaide and Brisbane have grown 14.49 per cent and 13.69 per cent, respectively.
The capitals have clearly driven the price trends over the month and year, with regional prices staying fairly flat in May. Only NSW and Tasmania recorded increases in their capital regions, with prices up roughly just over 0.1 per cent.
PropTrack senior economist and the report’s author, Eleanor Creagh, attributed this 17th consecutive month of price growth to the severe supply shortages plaguing the nation.
“Despite a rise in the number of homes for sale this year, strong population growth, tight rental markets, and home equity gains continue to bolster strong demand. Meanwhile, building activity remains challenged by capacity constraints and higher costs, with consequent tight housing supply pushing prices and rents higher,” Creagh said.
She noted that the supply strain was having the effect of working against high interest rates, which would normally cool price growth.
“This mismatch between supply and demand is continuing to offset the higher interest rate environment. Further, current interest rate stability has sustained buyer and seller confidence, while ongoing home price rises are likely incentivising many to overcome affordability challenges and transact with the expectation of further growth,” she said.
Creagh forecasts that even with the demand abating, prices were set to remain on their current trajectory.
“Despite some easing in the rate of population growth and more stock on market, home prices are expected to lift further in the months ahead. Although, it is likely the pace of growth will continue slowing through the seasonally quieter winter period, particularly with interest rate cut expectations pushed out to late-2025,” she said.
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