Property prices hit new highs as growth continues


Australia’s property market has fully recovered from the 2022 downturn, with prices hitting a record high in the December quarter.

According to the latest Domain House Price Report, the median house price for the combined capital cities ended 2023 at $1.094 million, which was 2.1 per cent up on the September quarter.

For the combined regional centres, the median house price has hit $585,765, which is 0.4 per cent up on the previous quarter.

Combined capital city unit prices have also risen, with the median price now at $638,372, which is up 2.3 per cent on the September quarter.

However, the median unit price in the combined regionals has dropped 3.1 per cent, quarter-on-quarter, to $449,662. 

Domain Chief of Research and Economics Dr Nicola Powell said some homeowners would be surprised at the latest property prices.

“For your everyday Australian, I do think this is going to be quite a surprise,” she said.

“We’ve got a big chunk of homeowners that own outright or have a large chunk of equity and that dynamic, when you’ve got a stake in a housing market, helps to support price anyway, because people don’t sell if prices are falling.

“That’s exactly what we saw during the downturn, but we have ended 2023 with house and unit prices, across the combined capitals, at new records.

“I would describe it as a steady recovery for houses and a fairly speedy one for units, because we saw house prices fall for three quarters and it took four consecutive quarters in a row to recoup.

“Unit prices actually had a longer downturn. 

“They fell for five quarters in a row and only took three quarters to recoup that growth.”

Sydney, Brisbane, Adelaide and Perth all recorded record median house prices in the December quarter.

Sydney has the highest median house price, up 10.6 per cent year-on-year to $1.595 million, while Adelaide leads the way with the most growth, at 12.7 per cent, to record a median house price of $875,034.

Brisbane’s median house price is up 9.7 per cent year-on-year to $888,285, while Perth’s climbed 11.9 per cent to $742,390.

Unit prices in Canberra ($625,597), Brisbane ($524,202) and Adelaide ($484,407) are also at record-high. 

“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,” Dr Powell said.

“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.”

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Dr Powell said the latest data showed property prices were still rising, but the pace of growth had slowed, driven by new stock coming to market and easing the competition.

But she warned it was not enough to halt price growth entirely.

“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,” Dr Powell said.

“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.”

Sydney

House prices have fully recovered, with the market moving through its fourth consecutive quarter of house and unit price growth – momentum not seen since 2021. 

This persistent growth has resulted in a new peak for house prices, recovering all of the $147,000 value lost during the 2022 downturn.

Sydney’s unit price recovery also picked up pace, rising about one-third faster over the December quarter than the previous quarter. 

Dr Powell said Sydney was a more challenging market for first-time buyers to enter into.

“A house is twice the price of a unit in Sydney,” she said.

“For a market like Sydney, you’re going to have to make a few leaps to get to that dream state of a detached house.”

In the future, Dr Powell said the NSW Government would need to consider its land use carefully to ensure there is enough housing for all sections of the market.

“That middle affordability – terrace houses, townhouses and duplexes – Sydney is really screaming out for,” she said.

Melbourne

Melbourne’s housing market gathered momentum over the December quarter, with house prices rising slightly faster than the previous quarter, to produce the steepest quarterly gain in two years.

Since reaching a trough in March 2023, house prices have recovered roughly $25,000 of the $72,000 value lost during the 2022-23 downturn.

It’s about one-third of the way into its recovery.

Dr Powell said Melbourne’s property market was “fascinating” at the moment.

“It’s grown, but the growth in house prices has been very modest,” she said.

“It’s now grown for three quarters in a row, it’s been below 1 per cent, very modest, consistent growth and it’s been incredibly resilient. 

“These are conditions that are great, probably for buyers and sellers.

“It’s almost a very balanced market.”

Brisbane

Brisbane house prices moved through their fourth quarter of growth, and continue to gather momentum, lifting annual gains to the steepest since September 2022. 

House prices now sit about $31,000 (or 3.6 per cent) above the previous price peak reached in the June 2022 quarter. 

Brisbane unit prices continue to break records by achieving another price peak and outperforming houses for the seventh consecutive quarter

The gap between house and unit prices continues to close, with houses now 69 per cent more expensive than units, which is a 2.5-year low.

Adelaide

House price growth lost momentum over the December quarter to rise roughly one-third slower than the previous quarter.

House prices rose 3.3 per cent in the December quarter, which remains well above the historical average growth of 2.6 per cent.

Adelaide unit prices continued to grow over the December quarter at an eased pace one-third slower than the previous quarter. 

Adelaide is one of only three capital cities where unit prices are currently at an all-time high. 

Canberra 

Canberra bucked the national trend, with house prices falling in the December quarter, reversing all of the growth recorded in the previous quarter. 

House prices now sit 12.9 per cent below the June 2022 peak, down by about $151,000.

Canberra is now the furthest from its price peak out of all the capitals. 

Conversely, unit prices moved through their fourth consecutive quarter of price growth, which was momentum not seen since 2020-21. 

Perth

House price growth gathered momentum to rise for the fifth consecutive quarter to another record. 

It was the steepest quarterly increase in three years and the fastest rise of any city market.

Perth’s unit prices continued to grow for the third consecutive quarter, producing the fastest quarterly gain since March 2021 and accelerating annual gains to a two-year high. 

Hobart

Hobart’s housing market appears to have moved into a pricing recovery, with house prices rising over the December quarter, providing the best outcome since March 2022. 

Hobart’s unit market continued to show great volatility, with an increase of 4 per cent over the quarter, reversing part of the previous quarter’s loss. 

Darwin

House prices declined over the December quarter, a turnaround following the previous quarter’s steady outcome.

Unit prices in Darwin also decreased after two consecutive quarters of increases. 

Darwin remains Australia’s most affordable city in which to purchase a house and a unit. 



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