- Home prices in Australia climbed a further 0.6% in February, according to CoreLogic Home Value Index (HVI)
- The median dwelling value nationwide is currently $765,762
- Perth and other regional areas in WA continue to lead the charge in property price growth
- All capitals posted price increases except Hobart
- PropTrack's Home Price Index (HPI) also shows dwelling values went up in February, albeit at a more modest 0.45%
Last month’s lift, which marked the 13th consecutive monthly gain, has brought the median dwelling value up to $765,762, according to CoreLogic’s Home Value Index (HVI) released today.
Perth led the charge with the biggest monthly price increase of 1.8%. The top-performing capital is followed by Adelaide (up 1.1%), Brisbane (up 0.9%), and Canberra (up 0.7%).
Melbourne also emerged from a three-month slump of negative growth to record a subtle 0.1% rise.
The rest of the major cities posted price gains except Hobart (down 0.3%) in February.
Regional SA (up 1.1%), WA and Queensland (both up 1.0%) also showed a consistently high rate of capital growth month-on-month.
Annually, property prices across the nation now sell 8.9% higher than last year.
CoreLogic research director Tim Lawless attributed the continuous growth in home values to improving sentiments buoyed by a positive shift in market outlook.
“Potentially, we are seeing some early signs of a boost to housing confidence as inflation eases and expectations for a rate cut, or cuts, later this year firm up,” he said.
With inflation and other indicators tracking towards the RBA target, major bank economists forecast rate cuts will begin in mid-2024.
This has been the outlook this year, despite the Reserve Bank maintaining a neutral stance, refraining from ruling out further rate hikes.
The January CPI showed inflation was at its lowest level since November 2021 at 3.4%. The latest read reinforces the RBA’s position that inflation is on track to reach its 2-3% target band.
Although the RBA has hiked the cash rate and kept it at its current peak, housing values remained resilient as demand continues to outstrip supply, according to Mr Lawless.
“The ongoing rise in housing values reflects a persistent imbalance between supply and demand which varies in magnitude across our cities and regions,” he said.
“Last years’ rate hikes clearly dented capital gains, but higher interest rates haven’t been enough to extinguish growth entirely.
“The shortfall of housing supply relative to housing demand is continuing to place upward pressure on home values across most regions.”
WA outperforms other regions
Perth and parts of regional WA are emerging as the favourites among investors as they continue to witness solid demand on account of affordability relative to other regions.
“These regions are generally benefitting from comparatively lower housing prices and positive demographic factors that continue to support housing demand,” Mr Lawless said.
Home values in Perth recorded the biggest price leap among other capitals, jumping 18.3% over the 12 months ending February.
Quarterly, the WA capital also posted the largest growth at 5.2%.
Armadale in the southeast and Rockingham in the southwest, posted the biggest annual leap in prices among capital city SA3s, increasing by 28.6% and 25.1%, respectively.
WA’s coastal towns Albany and Bunbury are also seeing huge demand as their property price growth outpaced other regional areas across the country in the three months to January.
Steering the upswing of home values in WA is the surge in net overseas and interstate migration and its tight rental market.
As of January, Perth has the lowest vacancy rate among capitals at 0.76%.
Mr Lawless said the intense competition for rental properties has been driving renters to transition towards homeownership “if they can afford to do so”.
Home prices in capital cities
In line with CoreLogic’s monthly HVI, PropTrack’s Home Price Index (HPI), released on the same day, also showed housing prices climbed, albeit by a more modest 0.45%.
CoreLogic’s HVI uses hedonic regression, which breaks down the value of homes into observable characteristics (e.g. size, location), to measure housing prices.
PropTrack, on the other hand, utilises a hybrid methodology that includes repeat sales regression that matches transactions of identical properties over time.
The median home price valued pegged by PropTrack was $761,000 as of 29 February.
Perth
PropTrack’s February index also revealed Perth as the top-performing city with a monthly dwelling value increase of 0.56%.
“Record low supply amid strong buyer demand has resulted in a sellers’ market,” said Eleanor Creagh, senior economist at PropTrack.
“The relative affordability of the city’s homes, population growth, and very tight rental markets are also supporting home values.”
At $651k as of February, Perth properties are currently selling 16.32% higher than last year, based on the index.
Sydney
Sydney home prices lifted 0.55% in February to a new peak of $1.053 million. The capital remains the only city in the country to hit the $1 million mark.
“After the pace of home price growth slowed through the holiday period, growth reaccelerated with prices rising 1% year to date,” Ms Creagh said.
Annually, home prices in Sydney rose 7.77%
Brisbane
Home prices in the Queensland capital lifted a further 0.54% to bring the median price to $797k.
Brisbane has been one of the strongest-performing markets since the pandemic onset, with prices up 60.7% since March 2020.
Home prices in Brisbane are now 12.16% higher than last year.
Melbourne
Despite the 0.28% lift, home prices in Melbourne remained 3.87% below their peak in March 2022.
“The price recovery in Melbourne is lagging Sydney and Brisbane but remains ahead of Hobart and Canberra, with prices up 1.66% from their January 2023 low,” Ms Creagh noted.
The soft price growth in Victoria’s capital was attributed to the current oversupply in the city.
Adelaide
Adelaide home prices rose 0.81% to $709k, a new peak
The city follows Perth as the top-performing capital, with dwelling values climbing 12.76% year-on-year.
Along with comparative affordability defying rate increases, Ms Creagh said, “Low stock levels are also intensifying competition, with home prices in Adelaide rising at a fast pace in 2024.”
ACT
Home prices in Canberra went up 0.49% to $828k in February.
Despite recovering a small portion of falls, PropTrack said prices remained 5.42% below their March 2022 peak.
Darwin
Darwin home prices rose a marginal 0.08% to bring the median home price to $481k.
Hobart
Hobart recorded the only price fall in the month, dropping 0.12% to $664k.
Photo by Urlaubs Tracker on Unsplash
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