Property prices to fully recover by year’s end: Domain
House prices are on track to have completely recovered from the 2022 downturn by the year’s end, according to new data.
Domain has reported that house prices across the combined capitals have recorded a third quarter of growth, up 1.9 per cent, while units notched a second quarter of upward momentum, rising 1.8 per cent over the three months to September.
If this pace continues, the firm reported that the property market is on track to have fully recouped the price falls recorded in 2022 within the next two months, with only $2,000 separating average house prices across the capitals from a new record and $5,000 for units.
Nicola Powell, Domain’s chief of research and economics, said that the latest quarterly results confirm that “all capital cities were in recovery or hitting a price peak”.
She noted that Sydney and Brisbane are the primary cities lifting the averages across the country, with the NSW and Queensland capitals taking charge of the recovery over the course of the year.
“By the end of the calendar year, house prices in Sydney and Brisbane are anticipated to recover fully from the 2022 downturn, reaching new records,” Dr Powell noted.
Much of the momentum has been driven by growth in the middle of the year, with price gains in Q3 actually slowing, though continuing upward.
Domain reported that the pace of quarterly growth has actually eased by roughly one-third compared to the previous quarter across the combined capitals. This is most evident for houses.
Dr Powell put the change in momentum down to economic factors that are limiting buyers’ budgets.
“It is worth pointing out that the pace of growth is currently being somewhat contained by the stretched affordability. If mortgage rates weren’t as high as they currently are – 5.98 per cent for a new owner-occupied home loan – price growth would be faster with the current housing undersupply,” she said.
Over the quarter, Adelaide and Perth alongside Sydney have recorded the highest house price gains, while house prices sit at an all time high in the South Australian capital as well as Perth.
For units, quarterly gains are steepest in Adelaide, Perth and Melbourne, while Adelaide and Brisbane are hitting record prices in the apartment market.
According to the housing analyst, the record-high numbers are driven by a number of factors that include interstate migration, record levels of overseas migration, a tight rental market, and a chronic undersupply.
For buyers who are in the position of considering purchasing, Dr Powell remarked that in light of these recent rises it is important to “weigh up the pros and cons of delaying purchasing timing along with financial planning”.
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