Domain’s latest House Price Report revealed that Australia’s housing market ended 2023 reaching full recovery after four quarters of growth.
Combined capital city prices over the December quarter smashed pre-slump records posted in March 2022 for houses and December 2021 for units.
The combined capitals' downturn - 5.4% overall - lasted three quarters, and took four quarters to fully recover.
The median price for houses across the combined capital cities reached nearly $1.095 million, while units were over $638,000.
Dr Nicola Powell, Domain’s chief of research and economics, attributed the price boosts to the huge housing demand driven by limited stock, high building costs, a tight rental market, and a growing population.
“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 recovery,” Dr Powell said.
“This pace is driven by new stock coming into the market, easing the competition, but not enough to halt price growth.”
Sydney house prices reach new peak
Four consecutive quarters of property price growth have resulted in Sydney’s house prices hitting a new record high and recovering the $147,000 value lost in 2022.
The New South Wales capital finished 2023 with a median house price at only $5,000 shy away from the $1.6-million mark. Domain forecasts Sydney house prices to set a new record in the first quarter of 2024.
Unit prices, on the other hand, have recouped over $47,000 of the $60,000 value lost during the market downturn, as recovery picked up pace in the last quarter of 2023.
|
Houses |
$1,595,310 |
|
Units |
$795,994 |
Melbourne’s recovery: slow and steady
Though the Melbourne housing market hasn’t fully recouped the value it lost during the 2022-23 property slump, the capital city has established its recovery on the back of consistent quarterly growth.
December median house price rose at its steepest quarterly gain in two years, while median unit price grew for the third consecutive quarter
|
Houses |
$1,047,273 |
|
Units |
$579,506 |
Brisbane house and unit prices hit new record
Brisbane house prices surpassed its June 2022 record, while units rose to a steep 16-year high.
A 3.6% lift was seen in December median house price, while the double-digit (14.2%) growth of units has further narrowed the price gap between housing types.
|
Houses |
$888,285 |
|
Units |
$524,202 |
Adelaide unit prices at an all-time high
A tight rental market and a chronic housing undersupply have driven the continuous growth of house and unit prices in Adelaide.
Albeit slower quarter-on-quarter increase, both housing types experienced price lifts at 3.3% for houses and 3.8% for units.
|
Houses |
$875,034 |
|
Units |
$484,407 |
Canberra house prices fall to new trough
Canberra house prices fell 3.5% in the December quarter, bringing it to a new price trough of $1.024 million or 12.9% below its June 2022 peak.
Domain figures showed Canberra is now the furthest from its price peak out of all the capitals, down more than $151,000 from the peak in median house prices.
Meanwhile, the December median unit price beat its previous peak six quarters ago by 2.2%
|
Houses |
$1,024,214 |
|
Units |
$625,597 |
Migration lifts Perth housing prices
Perth’s housing market continues to benefit from elevated migration, tight rental market, and spillover of buyers priced out in other capital cities.
Median house price in Perth rose for the fifth consecutive quarter to a 2.5-year high.
Unit prices likewise accelerated for the third consecutive quarter but remained 8.3% below the previous peak in 2014.
|
Houses |
$742,390 |
|
Units |
$387,218 |
Hobart housing market moves into recovery mode
Following consistent declines, houses in Hobart have moved into a pricing recovery after posting 2% growth in the December quarter.
Hobart’s unit prices increased 4%, reversing part of the previous quarter's loss and bringing the price gap between housing types to only 32% – the smallest in all capital cities.
Still, it has a ways to go, more than $57,000 down from the peak in house prices.
|
Houses |
$706,728 |
|
Units |
$535,426 |
Darwin house and unit prices decline
Darwin bucked the national trend as prices for both houses and units dropped over the December quarter.
Darwin remains Australia’s most affordable city to buy either a house or a unit.
|
Houses |
$640,806 |
|
Units |
$371,096 |
Further property price growth on the horizon
Citing a potential interest rate cut later this year, Domain forecasts stronger demand will drive housing prices to new record highs in 2024.
“On a more positive note, the tax cuts in July may alleviate some of the cost-of-living pressures, while easing inflation may help improve mortgage affordability,” Dr Powell said.
ANZ research suggests the tax cuts have the same effect on the household balance sheet as two, 25 basis point RBA rate cuts.
Photo by Curtis Adams on Pexels
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