Sydney house price for the sixth consecutive quarter.
Brisbane’s median house price will surpass the $1 million mark for the first time within the next three months and Perth will become a million-dollar city by June next year as their hot housing markets hit new peaks, Domain says.
Melbourne is also on track to hit a new high by the end of December if values continue to gain momentum.
However, house price growth in Sydney and Adelaide is likely to moderate as affordability worsens due to higher interest rates and previous rises in value.
Nicola Powell, Domain’s chief of research and economics said Brisbane and Perth will achieve their million-dollar milestones earlier than expected after their median house prices surged by 4 per cent and 6.6 per cent in just three months, respectively.
“We’re likely to see Perth’s median house price exceed the million-dollar benchmark by the end of the financial year boosted by its affordability, extraordinarily tight rental market and positive population dynamics,” said Dr Powell.
“Brisbane has similar housing dynamics as Perth, but it also has the large infrastructure spending ahead of the Olympics to support the housing market.”
In April, Domain predicted Brisbane could hit the million-dollar mark by the end of the year, but since then, prices have re-accelerated.
Over the past three months, Brisbane’s median house price has lifted almost $38,000 to a new high of $976,464. At this rate, the city only needs another $24,000 or 2.4 per cent increase to crack the $1 million mark.
Brisbane is on track to hit $1m median house price by September and Perth by next June, according to Domain.
For the first time, Perth house prices exceeded $800,000, with values rising $448 per day over the past year. The city would have to increase by another 17.3 per cent or $148,000 to exceed the $1 million median.
Dr Powell said that while house prices in Perth soared by 23.8 per cent in the past 12 months, this growth rate is expected to slow in the coming year as houses become less affordable, particularly to local buyers. But she added that “even if we see a slight loss in momentum, a 17 per cent increase is quite possible”.
Melbourne’s house prices also rose faster in the past three months, lifting by 1.7 per cent to $1.068 million, the strongest quarterly increase in two and a half years.
House values are now just 2.3 per cent away from regaining all the losses racked up over the 2022-2023 downturn. If the growth momentum continues at the current quarterly pace, Melbourne could hit a peak by the end of the year.
“Melbourne’s recovery has been slow, now lasting as long as the downturn, without cementing a full recovery, but it appears to now be gaining momentum,” Dr Powell said.
“To put this into perspective, this is the first time in almost four years Melbourne has recorded stronger positive quarterly growth than Sydney.
“I think this could be a sign that local buyers are perceiving the value for money that has been built in the past two years and now making a move before prices accelerate further.”
‘Changing market dynamics’
Sydney’s house prices rose for the sixth consecutive quarter and hit another record high in the three months to June. But the pace of price increases has more than halved at 1.3 per cent compared to the previous quarter and the historic average quarterly growth rate of 2.9 per cent.
Annual gains have also lost momentum for the first time this growth cycle. Sydney’s 7.8 per cent yearly increase is the slowest since September last year.
“We’re now seeing that stock level is starting to build in Sydney, and that, for me, is always a telltale sign of changing market dynamics,” Dr Powell said.
“New listings are now up 8 per cent compared to this time last year. The key change is they’re not selling as quickly, so new listings are coming to market quicker than they’re being sold.
“Total supply is 12 per cent higher compared to this time last year, so absorption rates are slowing down as stretched affordability make buyers more cautious in their search for their ideal property.”
Adelaide house prices rose by almost $24,000 or 2.6 per cent over the June quarter to a record high of $929,972. However, the pace of quarterly growth almost halved compared to the previous quarter.
Canberra house prices are back on the rise, increasing by almost $9,000 or 0.8 per cent during the same period.
Hobart’s house prices fell by 1.1 per cent to a three-year low, while Darwin was flat.
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