This article is from the Australian Property Journal archive
NEW price records are expected for Australia’s housing market in 2024, with the December quarter of 2023 marking full recovery from the 2022 downturn.
According to Domain’s latest House Price Report, the last quarter of 2023 saw a new price record for Australia’s housing market, with both combined capital house and unit prices ending 2023 at new highs.
The median house price for the December quarter was at $1,094,539 for Australia’s combined capitals, with unit prices at $638,372.
“While stretched affordability, cost of living pressures and high-interest rates were expected to put a lid on property prices in 2023, the undersupply of new homes, cost-to-build blowouts, a growing population and a tight rental market continued to boost housing demand,” said Nicola Powell, chief of research and economics at Domain.
“This led to new record prices for combined capital houses and units by the end of 2023, which broke the previous records that we saw in March 2022 for houses and December 2021 for units.”
House prices were down for three consecutive quarters and took four quarters to recover, while unit prices were down for five consecutive quarters and rebounded in three quarters.
“What the latest data is telling us is that the prices are still rising, but the pace of growth is slower than what it was in the early stage of the recovery,” added Powell.
“This pace is driven by new stock coming into the market, easing the competition, but not enough to halt price growth.”
In Sydney, house prices reached a new peak at $1,595,310, recovering the full $147,000 value lost during the 2022 downturn. While unit price was at $795,994.
Melbourne’s house market is set to fully recover from the downturn, having reached a trough in March 2023 and having recovered about one-third of the way.
In Brisbane, house price growth continued to gain momentum, with houses about $31,000 above their previous peak in June 2022.
Likewise, Brisbane’s unit prices reached another price peak, eclipsing house prices for the seventh quarter in a row.
Both Adelaide and Perth’s combined markets remained at peak, with Adelaide’s house prices the only market to see a slowing growth over the quarter.
Canberra was the only city to defy the national trend, with house prices fall over the December quarter. While unit prices continued to grow.
“Looking ahead to the rest of the year – in the shorter term, high-interest rates will continue to exert stress on mortgage affordability and limit borrowing capacity,” concluded Powell.
“With an interest rate cut tipped to happen in the latter half of the year, we are expecting to see an increasing demand that will likely drive upward price pressures on the housing market. On a more positive note, the tax cuts in July may alleviate some of the cost-of-living pressures and inflation is easing, which may help improve mortgage affordability.”
