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A new milestone has been reached in the Australian housing market, as a fourth city joins the ranks of those with median house prices surpassing the $1 million mark. This development places the city just after Brisbane and Canberra, where the median prices have climbed to $1,149,589 and $1,033,761, respectively.
This increase comes at a time when property prices continue to rise across the nation, even as the country braces for a potential interest rate hike amidst ongoing cost of living challenges. The housing market’s resilience highlights a complex economic landscape for potential homeowners.
The latest Home Value Index reveals a concerning trend: the most significant price increases are occurring in the most affordable segment of the market. Properties in the lower quarter of the price range are seeing the fastest growth, which threatens to make home ownership even more elusive for many Australians.
Meanwhile, Sydney continues to hold its position as the most expensive city for buying a house, with a median price of $1,598,819. However, the city’s growth has decelerated, showing only a 0.3 percent increase in January.
On a national scale, the value of Australian homes, encompassing both houses and apartments, saw a modest rise of 0.8 percent in January, as reported by Cotality’s Home Value Index. This marks a slight increase from the previous month’s growth rate of 0.6 percent, further illustrating the steady upward trend in the housing market.
“Despite the most unaffordable conditions on record in many cities, along with a rebound in cost of living pressures and prospect of a rate hike as early as (tomorrow), we are still seeing a broad-based rise in housing values,” Cotality’s research director Tim Lawless said.
However, Lawless suggested price rises are likely to ease this year, as demand eased and forecast interest rate hikes limited people’s ability to service larger mortgages.
The number of homes advertised for sale is currently 19 per cent below where it was at this time last year and 25 per cent below the five-year average.
At the same time, the quarterly number of home sales is one per cent higher than a year ago.
Australia’s smaller and mid-sized capitals have recorded the biggest jump in property prices, with Perth, Brisbane and Adelaide prices rising by between 1.2 and 2 per cent.
That compares to an incremental creep of just 0.2 and 0.1 per cent respectively for Sydney and Melbourne.
In the past year, Darwin has seen the steepest property price increases, up by almost a fifth (19.7 per cent).
The second-largest increase is in Perth, where combined house and unit prices have risen by 18.5 per cent annually, making it the third most expensive city to buy a property after Sydney and Brisbane.
Sydney and Melbourne properties are up a comparatively small 6.4 and 5.4 per cent annually.
In worrying news for housing affordability and equality, homes at the most affordable end of the housing market are seeing the largest price hikes.
House values in the lowest quartile rose by 1.3 per cent, compared to just 0.3 per cent rise in the top quartile.
“This trend of stronger growth conditions at lower price points is supported by intense competition for more affordable houses,” said Lawless.
“This is where first home buyers, investors and, progressively, mainstream demand is most concentrated.”
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