Key takeaways
National home prices lifted 0.22% to a new peak in August, and are now 6.16% higher than a year ago.
Prices in the combined capital cities have increased 6.49% over the past year, after climbing 0.25% in August. However, performance differs significantly across the capitals, reflecting a multi-speed market.
Perth (+0.79%), Hobart (+0.63%) and Adelaide (+0.45%) recorded the strongest growth in August.
Home price growth over the winter months has slowed in Sydney, yet prices still rose 0.32% in August. Meanwhile prices in Melbourne fell 0.18%, marking the fifth straight month of declines, with prices down 1.98% in that period.
Perth, Adelaide and Brisbane have recorded the fastest pace of growth of the capital cities for much of the past two years, with Perth prices up 23.24% in the past year, followed by Adelaide (+15.12%) and Brisbane (+13.95%).
Capital city prices have outpaced regional areas over the past year and this trend continued in August. Prices in regional areas rose 0.16% over the month to be 5.32% above August 2023 levels.
Performance was also diverse in regional areas. Regional WA (+0.41%) and regional Queensland (+0.26%) led growth in August and over the past year, while regional Victoria has sustained its streak of relative weakness, down 1.74% over the past year.
National home prices increased a further 0.22% across the country in August, according to PropTrack’s Home Price Index.
It is now cycling through 20 consecutive months of growth, although the pace of growth has slowed through the seasonally quieter period.
Perth continues to outperform, increasing another 0.9% in July. National home prices continued to increase in July but only just, increasing 0.08%, the smallest monthly increase recorded since prices stopped falling in late 2022.
This increase pushed national home prices up 6.3% over the past year, to record a new price peak.
Eleanor Creagh, Senior Economist at PropTrack commented:
“Housing demand remains buoyant, defying affordability constraints and fuelling continued growth across much of the country.
However, performance differs around the country with the balance between supply and demand the primary factor driving that variance.”
Capital cities retain their lead over the year
PropTrack’s data highlights that capital city prices have outpaced regional areas over the past year and this trend continued in August.
Ms Creagh further commented:
“Prices in regional areas rose 0.16% over the month to be 5.32% above August 2023 levels.
Performance was has also varied in regional areas. Regional WA (+0.41%) and regional Queensland (+0.26%) led growth in August and over the past year, while regional Victoria has sustained its streak of relative weakness, with prices down 1.74% over the past year.
Buyers in regional Victoria are enjoying a lot more choice with total stock on market around 40% above the prior 5 year average, giving buyers the upper hand.”
Outlook
PropTrack’s data show that home prices in 2023 remained resilient to the higher interest rate environment and this improvement in conditions that materialised in 2023 has continued in 2024, with national prices cycling through their 20th month of growth.
Ms Creagh noted:
“Although the number of homes hitting the market this year has lifted, strong population growth, tight rental markets and home equity gains are bolstering demand.
Meanwhile, building activity remains challenged, exacerbating a chronic shortage of housing.
Supporting price growth at present and in the period ahead, July’s tax cuts boosted borrowing capacities and buyers’ budgets, while the persistent growth in home prices is likely motivating many to overcome affordability challenges.
As a result, housing demand remains buoyant, defying affordability constraints and pushing prices higher across much of the country.
However, price growth differs around the country with affordability differences and the balance between supply and demand primarily driving that variance.
Home prices are expected to lift as activity ramps up into the spring selling season.
However, the expected uplift in choice, the uncertainty around timing of interest rate cuts and affordability constraints are likely to dampen the pace of price growth from the faster pace recorded in the first quarter of this year.”
