Australian Housing Market

The Australian housing market continues to show positive signs of growth, with both houses and units experiencing price increases. However, the market remains fragmented, with varying results across different capital cities. In this article, we will explore the latest data from My Housing Market and provide an overview of the current state of the Australian housing market.

National House Prices

The national capital city median house price increased by 0.4% to $1,147,015 over the August quarter compared to the July quarter. This represents a significant increase of 7.8% over the year ending August 2024. The quarterly house price has now increased over 18 of the past 19 months and has risen by 12.0% over the past two years.

Capital City Performance

Perth was the top performer over the quarter, with prices increasing by 1.7%. Adelaide and Brisbane also saw strong growth, with prices rising by 1.5% and 1.1% respectively. Sydney experienced a more modest increase of 0.2%. However, Melbourne, Hobart, Canberra, and Darwin all saw decreases in house prices over the month.

Annual Performance

Several capital cities have seen significant increases in house prices over the year ending the August quarter of 2024. Perth is the top performer, with prices up by a staggering 27.4%. Adelaide and Brisbane also experienced strong growth, with prices rising by 17.9% and 16.3% respectively. However, Hobart, Melbourne, Canberra, and Darwin have all seen decreases in annual house prices.

Here is a table summarizing the median house prices for each capital city in August 2024:

| Capital City | Median House Price | Month | This Year | 1 Year | 2 Year |
|————–|——————–|——-|———–|——–|——–|
| Sydney | $1,632,255 | 0.2% | 4.3% | 6.2% | 11.0% |
| Melbourne | $1,049,684 | -0.3% | -0.8% | -1.4% | 1.1% |
| Brisbane | $977,909 | 1.1% | 10.8% | 16.3% | 19.6% |
| Adelaide | $965,485 | 1.5% | 13.3% | 17.9% | 26.5% |
| Perth | $929,606 | 1.7% | 17.0% | 27.4% | 37.3% |
| Hobart | $664,532 | -1.0% | -1.0% | -0.3% | -10.1% |
| Darwin | $614,315 | -2.7% | 0.7% | -6.2% | -3.3% |
| Canberra | $943,240 | -1.8% | 0.1% | -2.7% | -3.0% |
| National | $1,147,015 | 0.4% | 5.5% | 7.8% | 12.0% |

National Unit Prices

National unit prices bounced back over August following a fall reported in the previous month, rising by 0.4% to $657,968. The national unit price is now 6.3% higher than the August quarter 2023 result.

Capital City Performance

Most capital cities reported higher unit prices over August, with Hobart being the top performer, seeing a 4.4% increase. Perth, Adelaide, Sydney, and Brisbane also saw modest increases of 1.5% and 0.4% respectively. However, Melbourne, Canberra, and Darwin all saw decreases in unit prices over the month.

Here is a table summarizing the median unit prices for each capital city in August 2024:

| Capital City | Median Unit Price | Month | This Year | 1 Year | 2 Year |
|————–|——————|——-|———–|——–|——–|
| Sydney | $775,406 | 0.4% | 3.9% | 4.4% | 6.7% |
| Melbourne | $564,537 | -0.1% | -1.6% | 0.9% | 0.1% |
| Brisbane | $549,549 | 0.4% | 19.4% | 24.7% | 39.1% |
| Adelaide | $515,121 | 1.4% | 11.2% | 19.3% | 38.8% |
| Perth | $494,580 | 1.5% | 19.9% | 28.6% | 33.1% |
| Hobart | $533,299 | 4.4% | 5.6% | 1.0% | -0.6% |
| Darwin | $360,518 | -1.3% | 12.7% | -1.9% | -1.8% |
| Canberra | $501,930 | -0.3% | -0.2% | -1.3% | -2.3% |
| National | $657,968 | 0.4% | 4.7% | 6.3% | 9.0% |

Market Performance

The housing market in capital cities has generally produced positive results over August for both houses and units. However, there is still significant variation between capital cities.

Leaders in Price Growth

Perth, Adelaide, and Brisbane continue to be the runaway leaders for price growth, with no signs of easing. These cities have seen consistent growth over the past year and show no signs of slowing down.

Underperforming Capitals

Melbourne and Sydney have slowed down during the winter months following previous periods of solid to moderate growth. On the other hand, Hobart, Darwin, and Canberra remain clear underperformers in terms of price growth.

Active Winter Market

Despite the variations in price growth, the winter housing market has remained reasonably active overall. There are still high numbers of seasonal listings and relatively high numbers of weekend home auction sales.

Future Outlook

The national housing market is expected to continue to increase over the coming months, driven by the strong performance of Perth, Brisbane, and Adelaide. These cities offer affordability positives, which attract both buyers and sellers.

Opportunities for buyers also exist in Sydney and Melbourne, where prices are currently below or similar to previous peaks recorded in early 2022.

While growth rates are expected to remain generally positive, they are unlikely to match the strong results seen during the winter period last year. The market is currently in a reviving phase, driven by a surge in buyer activity.

Underlying drivers, such as low jobless rates, surging job growth, and near-record wage increases, will continue to support housing market activity. However, the spectre of higher interest rates may ease, as recent monthly inflation data has fallen sharply and is approaching the RBA target range.

Migration levels will also contribute to the chronic housing undersupply, leading to high rents and low vacancy rates in capital city rental markets. However, early signs of rising rental supply are starting to emerge.

The current high rents and higher prices present attractive opportunities for first-home buyers and investors seeking solid investment returns.

In summary, the Australian housing market remains dynamic, with varying results across different capital cities. While some cities continue to experience strong price growth, others are underperforming. The market is expected to continue its upward trajectory, driven by underlying economic factors and affordability advantages in certain cities.