Record high: Australian home prices jump as property market shakes off summer slowdown
Home price growth accelerated in February, with strong buyer demand soaking up the influx of new properties that hit the market over summer.
The property market has brushed off its summer slowdown, with values rising across most of the country in February and prices breaking records in four capitals.
The latest PropTrack Home Price Index showed the national median home value jumped 0.45% last month, while the combined capital city median climbed 0.48%.
Australia’s median home value is up 6.15% over the past year while capital city prices have grown a little faster, sitting 7.06% higher than this time last year.
PropTrack senior economist Eleanor Creagh said the slowdown in home price growth at the end of last year has reversed and prices have hit a new peak, despite rising listing volumes.
"More homes have hit the market this year, but demand has kept up with that increase," she said.
Strong population growth, tight rental markets and the chance of interest rate cuts have bolstered demand, Ms Creagh said.
"The expectation that interest rates will fall in the second half of 2024 is likely providing a positive tailwind for activity," she said.
Data released on Wednesday showed the annual rate of inflation remained steady at 3.4% in January.
While this is still outside the Reserve Bank’s 2-3% target range, the flat result increases the likelihood that rates have peaked, with the next rate move likely to be a cut.
Brisbane is now as expensive as Melbourne
Of the capital cities, Adelaide recorded the strongest growth in February, followed by Perth and Sydney.
But in Brisbane, remarkable growth has pushed up the city’s median home value to equal that of Melbourne.
Brisbane home values grew 12.16% over the past year, compared with 1.33% growth in Melbourne.
The stark difference in growth rates means Brisbane has now caught up, with both cities recording a median home value of $797,000 – tied for third place behind Sydney, Australia’s most expensive city, and second-priciest Canberra.
Further price rises are expected in 2024
Despite more homes being listed for sale and rising prices making property less affordable, markets are expected to keep steaming ahead in 2024.
A slowdown in construction has hampered the supply of new housing, Ms Creagh said, concentrating demand for existing properties.
Meanwhile, potential rate cuts could boost buyers’ borrowing capacities, giving them more money to spend.
"Looking ahead, the positive tailwinds for housing demand and a slowdown in the completion of new homes are likely to offset the impact of reduced affordability and a slowing economy, supporting prices," Ms Creagh said.
"As a result, prices are expected to lift further in the months ahead."
To continue reading, please go to:
https://www.realestate.com.au/news/record-high-australian-home-prices-jump-as-property-market-shakes-off-summer-slowdown/
The property market has brushed off its summer slowdown, with values rising across most of the country in February and prices breaking records in four capitals.
The latest PropTrack Home Price Index showed the national median home value jumped 0.45% last month, while the combined capital city median climbed 0.48%.
Australia’s median home value is up 6.15% over the past year while capital city prices have grown a little faster, sitting 7.06% higher than this time last year.
PropTrack senior economist Eleanor Creagh said the slowdown in home price growth at the end of last year has reversed and prices have hit a new peak, despite rising listing volumes.
"More homes have hit the market this year, but demand has kept up with that increase," she said.
Strong population growth, tight rental markets and the chance of interest rate cuts have bolstered demand, Ms Creagh said.
"The expectation that interest rates will fall in the second half of 2024 is likely providing a positive tailwind for activity," she said.
Data released on Wednesday showed the annual rate of inflation remained steady at 3.4% in January.
While this is still outside the Reserve Bank’s 2-3% target range, the flat result increases the likelihood that rates have peaked, with the next rate move likely to be a cut.
Brisbane is now as expensive as Melbourne
Of the capital cities, Adelaide recorded the strongest growth in February, followed by Perth and Sydney.
But in Brisbane, remarkable growth has pushed up the city’s median home value to equal that of Melbourne.
Brisbane home values grew 12.16% over the past year, compared with 1.33% growth in Melbourne.
The stark difference in growth rates means Brisbane has now caught up, with both cities recording a median home value of $797,000 – tied for third place behind Sydney, Australia’s most expensive city, and second-priciest Canberra.
Further price rises are expected in 2024
Despite more homes being listed for sale and rising prices making property less affordable, markets are expected to keep steaming ahead in 2024.
A slowdown in construction has hampered the supply of new housing, Ms Creagh said, concentrating demand for existing properties.
Meanwhile, potential rate cuts could boost buyers’ borrowing capacities, giving them more money to spend.
"Looking ahead, the positive tailwinds for housing demand and a slowdown in the completion of new homes are likely to offset the impact of reduced affordability and a slowing economy, supporting prices," Ms Creagh said.
"As a result, prices are expected to lift further in the months ahead."
To continue reading, please go to:
https://www.realestate.com.au/news/record-high-australian-home-prices-jump-as-property-market-shakes-off-summer-slowdown/
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