Australian Housing Market Property Values Set to Reach New Peak by 2023

The Australian housing market is experiencing a significant upward trend, with the median property value expected to reach a new peak by the end of 2023. This surge in property prices comes after a period of decline earlier this year, and the rate of increase has surpassed the rate of inflation. According to CoreLogic research director Tim Lawless, while home values are still 1.3 per cent below the record reached in April last year, a new national record could be achieved by the end of November.

Record Highs in Perth and Adelaide

Perth and Adelaide have already reached new record highs in dwelling values. In September, Adelaide recorded the highest capital gain at 4.3 per cent, surpassing Brisbane and Perth. Adelaide house prices have seen a significant increase of 6.3 per cent from their trough in March this year. Brisbane is also expected to reach a new record high in October, with home values currently only 0.6 per cent below their previous peak.

Nominal Recovery Yet to Come for Hobart and Canberra

While some cities have already experienced a surge in property values, Hobart and Canberra still have a way to go before staging a nominal recovery. Hobart dwellings have recorded a 7 per cent decline in annual figures, indicating that a significant rebound is needed for a full recovery. Canberra, on the other hand, has seen a modest 0.2 per cent increase in property values.

The State of Australian House Prices in Each Capital City

Here is an overview of how house and unit prices are looking in each capital city for September:

Adelaide

• Monthly change: 1.7 per cent increase
• Adelaide median house value: $742,909
• Median unit value: $464,414

Adelaide has recorded the highest capital gain in the September quarter, with a 4.3 per cent increase. House prices in Adelaide have risen by 6.3 per cent since their lowest point in March.

Brisbane

• Monthly change: 1.3 per cent increase
• Brisbane median house value: $848,680
• Median unit value: $539,169

Brisbane is expected to reach a new record high in October, with home values currently only 0.6 per cent below their previous peak. Most areas in Queensland have seen an increase in home values over the past year.

Canberra

• Monthly change: 0.2 per cent increase
• Canberra median house value: $956,600
• Median unit value: $591,952

Canberra has seen a modest 0.2 per cent increase in property values. The city still has room for growth before reaching a nominal recovery.

Darwin

• Monthly change: 0.1 per cent increase
• Darwin median house value: $579,142
• Median unit value: $382,116

Darwin has experienced a slight increase in property values, indicating a slow but steady recovery in the market.

Hobart

• Monthly change: 0.6 per cent decrease
• Hobart median house value: $702,377
• Median unit value: $520,460

Hobart has seen a decrease in property values, with a 0.6 per cent decline in September. The city has a significant distance to go before staging a nominal recovery.

Melbourne

• Monthly change: 0.4 per cent increase
• Melbourne median house value: $933,281
• Median unit value: $612,585

Melbourne has seen a 4.3 per cent increase in property prices since bottoming out in January. The city also had an above-average number of homes on the market.

Perth

• Monthly change: 1.3 per cent increase
• Perth median house value: $646,777
• Median unit value: $437,883

Perth has experienced strong September quarter figures, with a 3.6 per cent increase in house values. The city’s total advertised supply is significantly below the previous five-year average.

Sydney

• Monthly change: 1 per cent increase
• Sydney median house value: $1,381,045
• Median unit value: $828,919

Sydney home values have increased by 10.6 per cent since bottoming out in January. The median house value in Sydney is nearing its peak at $1.4 million, while the unit value is also close to its previous record.

Expected Continued Rise in Property Prices

Looking ahead, there are several factors that indicate property prices will continue to rise. Interest rates are near their peak, and population growth is rebounding strongly. Together with low levels of supply, this is expected to drive further increases in property prices. PRD chief economist Diaswati Mardiasmo believes that the limited supply of houses, coupled with international investors returning to the market, will contribute to rising prices. The stability of interest rates also boosts buyer confidence and encourages more people to enter the market, further driving up demand and prices.

While house prices are expected to continue their upward trajectory, it is unlikely that the rapid increase seen during the pandemic will be replicated. The market is expected to see a more sustainable and steady growth in property values.

In conclusion, the Australian housing market is experiencing a significant rebound, with property values set to reach new peaks by the end of 2023. Various factors, including low supply, population growth, and stable interest rates, contribute to the expected rise in property prices. However, the market is anticipated to see a more sustainable growth pattern compared to the rapid increase witnessed during the pandemic.

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