Australia’s property market has almost entirely recovered from the 2022 downturn and will do so by the end of the year, according to Domain.
The Domain House Price Report for the September quarter, has revealed house prices across the combined capital cities have just $1667 left to recoup from last year’s downturn, before hitting a new record.
The median house price across the combined capitals rose 1.9 per cent in the September quarter to $1.072 million.
The combined capitals’ median unit price also climbed 1.8 per cent in the same three months to reach $622,734.
Domain Chief of Research Dr Nicola Powell said just $5000 separated units from a new price record as well.
“September’s quarter confirms all Australian capital cities are in recovery or at a price peak,” she said.
Sydney continues to lead the recovery, with Brisbane close behind.
Between March and December last year Sydney house prices fell 9.3 per cent, or $148,092, from peak to trough, while so far this year they have recovered $135,705.
The median price of a house in Sydney is now $1.578 million.
Brisbane’s house prices peaked in June last year, before dropping $47,381 to a trough in December.
This year, Brisbane house prices have $39,020, to sit at a median of $848,752.
“By the end of the calendar year, house prices in Sydney and Brisbane are anticipated to recover fully from the 2022 downturn, reaching new records,” Dr Powell said.
“Adelaide, Perth and Sydney recorded the highest house price gains over the September quarter.
“For units, quarterly gains were steepest in Adelaide, Perth and Melbourne.
“Adelaide and Perth’s house prices are at an all-time high, for units, it’s Adelaide and Brisbane.
“These record-high numbers are driven by a series of factors: interstate migration, record levels of overseas migration, a tight rental market, and a chronic undersupply.”
Dr Powell said higher interest rates had slowed the pace of growth in the September quarter somewhat, easing by roughly one-third compared to the previous quarter across the combined capitals.
“It is worth pointing out that the pace of growth is currently being somewhat contained by the stretched affordability,” she said.
“If mortgage rates weren’t as high as they currently are (5.98 per cent for a new owner-occupied home loan1), price growth would be faster with the current housing undersupply.”
Dr Powell said it was important for buyers to weigh up the pros and cons of delaying their purchasing timing along with financial planning.
“During the last quarter, choice has also risen for buyers, as sellers regain market confidence and pent-up supply makes its mark,” she said.
“September’s auction volumes reached a 16-month high and the total national supply is now 5.1 per cent above July’s low (6.5 per cent higher across the combined capitals) with new listings in Sydney, Melbourne, Canberra and Hobart higher annually.
“For sellers, as the market recovers, it is about pricing the home correctly ahead of the increasing competition.”
Sydney recorded its third quarter of house and unit price growth, a stretch that hasn’t occurred since 2021.
Sydney house prices have just $12,387 left to recoup from the 2022 downturn and are ontrack to reach a new high by the end of 2023.
Sydney unit price recovery posted the first annual gain in a year and a half.
Houses have outperformed unit prices for four consecutive quarters, making Sydney one of only two capital cities with a record price gap between property types – a house is twice the price of a unit.
Melbourne’s housing market recovery gathered a little momentum over the September quarter, with house prices rising faster than the previous quarter to produce the steepest quarterly gain since late 2021.
Melbourne’s unit price recovery moved through its second consecutive quarter of price growth – the strongest six months since the latter half of 2019 – pushing annual gains into positive territory for the first time since mid-2022.
Melbourne is now the second most expensive city in which to purchase a unit, overtaking Canberra for the first time since March 2022.
Brisbane house prices moved through their third quarter of growth, pushing annual gains to positive for the first time in a year. Brisbane house prices are on track to reach a new record high before the end of 2023.
Brisbane was one of only two capital cities to see unit prices reach a record high over the September quarter, along with Adelaide.
For the first time in the city’s history, unit prices have outperformed house prices for six consecutive quarters, narrowing the price gap between property types to just over a two-year low.
Adelaide is currently the best-performing capital city for houses and units, providing homeowners with the fastest quarterly gains of 4.4 per cent and 4 per cent, respectively.
It is also the only capital city with record house ($844,654) and unit ($466,379) prices.
Canberra’s housing market is rising again, with house prices increasing over the September quarter for the first time since mid-2022 – a turnaround that follows four consecutive quarters of decline.
In the September quarter, Canberra house prices increased 1.8 per cent to $1.042 million.
Unit prices continued to decline over the September quarter, down 0.6 per cent, although the depth has eased compared to the previous quarter, helping to slow the annual pace of decline.
Perth is one of only two capital cities with record house prices, along with Adelaide.
Perth’s housing market continues to benefit from a positive flow of net interstate migration, record levels of overseas migration and being Australia’s tightest city rental market (joint with Adelaide).
House prices rose 3 per cent in the September quarter to another record high of $713,811.
It is the steepest annual increase since mid-2021 at 10.4 per cent.
Unit prices increased over the quarter and year to provide the best outcome since 2021.
Hobart’s housing market recovery gathered momentum over the September quarter, with house prices rising three times faster than the previous quarter.
Despite the rise, the current pace of quarterly growth of 1.9 per cent is moderate compared to the historical average of 3.8 per cent.
Hobart’s unit market continues to display greater price volatility.
Unit prices dropped over the quarter and year. It is the steepest annual fall in roughly a decade.
Darwin remains Australia’s most affordable city in which to purchase a house and a unit.
House prices are lower than a year ago, although the depth of declines is now easing.
Unit prices rose over the quarter and year – the first positive annual growth since 2022.
1 RBA, Housing Lending Rates, Statistical Table F6, for a new owner occupier home loan, August 2023.