National home prices reached a new peak in November following 23 consecutive months of growth, however despite growth remaining positive, momentum has slowed.
Although price growth has slowed, prices lifted 0.15% in November and the national median home value hit $800,000 for the first time.
While housing demand has remained defiant to persistent affordability constraints, we have seen the pace of home price growth slow since earlier in the year.
The softening in growth has occurred alongside a surge in stock for sale giving buyers more choice and less urgency to transact. Though significant regional disparities persist, with differing supply and demand conditions driving varied performance.
•National home prices hit a new record in November, rising 0.15% over the month to sit 5.53% higher than a year ago.
•Prices in the combined capital cities have increased 5.55% over the past year, after climbing 0.11% in November, but price performance remains varied across the country.
•Hobart (+0.43%) and Adelaide (+0.40%) recorded the strongest growth in November of the capital cities, followed by Brisbane and Canberra (+0.28%).
•Melbourne ranked as the fifth-most expensive capital in November, down from fourth place in October and third place earlier this year. Values in Adelaide have now surpassed Melbourne after Brisbane dwelling values surpassed Melbourne earlier this year.
•Perth, Adelaide and Brisbane remain the strongest capital city markets for annual growth, with prices up 18.74%, 14.64% and 12.56% in the past year, respectively.
•Annual price growth in the combined capitals (+5.55%) has just outpaced regional areas (+5.48%), but capital city buyers have been spoilt for choice with the surge in new listing volumes through spring. As a result, price growth has levelled out in the capitals, with regional areas leading in November. Prices in regional areas rose 0.26% over the month compared to 0.11% in the capitals.
•Performance is also mixed in regional areas. Regional SA (+1.06%) and regional Tasmania (+0.65%) led growth in November, while momentum in regional Victoria remains subdued with prices down 2.09% over the past year following a 0.05% fall in November.
Australian home prices hit a new peak in November after 23 consecutive months of growth. National home prices lifted 0.15% in November and are now 5.53% higher than a year ago.
Prices lifted in every capital city in November except Melbourne, though the pace of growth has slowed as buyers enjoy more choice.
The increase in properties hitting the market in recent months has been met with strong demand, but is a contributor to slowing price growth along with affordability constraints and the sustained higher interest rate environment.
The pace of home price growth remained varied across the capitals in November, reflecting multi-speed market conditions, with differing supply and demand conditions continuing diverse performance across the country.
Prices in the combined capital cities have increased 5.55% over the past year, after climbing 0.11% in November.
Hobart (+0.43%) and Adelaide (+0.40%) recorded the strongest growth in November of the capital cities, followed by Brisbane (+0.28%) and Canberra (+0.28%), while Melbourne was the only capital to see prices fall in November.
Melbourne is also now the only capital to have seen prices fall over the past year, making it the weakest capital comparing annual growth, though when comparing change from peak both Hobart and Canberra are weaker.
Strong growth in Adelaide has seen median values surpass Melbourne in November. Melbourne now ranks as the fifth-most expensive capital in November, down from fourth place in October, and third place earlier this year after Brisbane dwelling values surpassed Melbourne earlier this year. If current trends persist, values in Perth may also eclipse Melbourne by the first half of next year.
Hobart recorded the strongest growth out of all the capitals In November as conditions recover following their two-and-a-half-year decline. Prices in Hobart rose 0.43% over the month to now sit 1.33% higher than the same time last year. It is the first time Hobart has recorded positive annual growth since October 2022. Even so, Hobart remains the weakest capital city market when comparing change from peak, with prices down 7.22%, despite having recovered a fifth of their decline in the past seven months.
Perth, Adelaide and Brisbane remain the strongest capital city markets for annual growth, with prices up 18.74%, 14.64% and 12.56% in the past year, respectively.
While buyers have enjoyed greater choice throughout spring, the increase in stock for sale has seen the pace of price growth slow over the past quarter in each of these 3 markets. Despite the increase in new listings through spring there remains less stock on market relative to historic average levels, and total stock on market remains historically low as new listings are quickly absorbed amid strong buyer demand.
The comparative affordability of the city’s homes, home equity gains, population growth, and tight rental markets have contributed to persistent strong growth in Brisbane, Perth, and Adelaide in recent years.
Though after the persistent strong growth, with home prices up around 80% over the past 5 years in each capital, that comparative advantage has been eroded. The comparative affordability of the city’s homes has contributed to persistently strong growth of recent years, though the pace of price growth is slowing with affordability having deteriorated significantly and the higher interest rate environment persisting
Price momentum has been consistently weaker in Melbourne as buyers have consistently enjoyed more choice relative to other markets, higher property taxes and higher unemployment in Victoria are also playing a role. Increases in taxes on investment properties have made owning a rental property less attractive in Victoria, leading to an uplift in the share of investors selling.
At the same time, in the past decade construction rates relative to population growth in Victoria have been more balanced compared to other parts of the country.
Melbourne home prices fell slightly in November, dropping by 0.07%. Prices have fallen for seven of the past eight months, bringing them 1.63% below November 2023 levels and 4.38% below their March 2022 peak.
Annual price growth in the combined capitals (+5.55%) has just outpaced regional areas (+5.48%), but capital city buyers have been spoilt for choice with the surge in new listing volumes through spring. As a result, price growth has levelled out in the capitals, with regional areas leading in November.
Prices in regional areas rose 0.26% over the month, more than 2 times the 0.11% lift in the combined capitals.
Performance is also mixed in regional areas. Regional SA (+1.06%) and regional Tasmania (+0.65%) led growth in November, and continue to record a fast pace of annual growth. Meanwhile momentum in regional Victoria remains subdued with prices down 2.09% over the past year following a 0.05% fall in November.
Differing supply and demand conditions are contributing with buyers in regional Victoria enjoying a lot more choice contributing to subdued price momentum. Meanwhile Victoria’s unemployment rate has risen over the last year, and is now the highest in the country.
Nationally house prices lifted by 0.19% in November, again outpacing units, with unit prices nationally recording 0.05% decline in November.
National house prices have lifted 5.64% over the past year, outpacing growth in unit values (4.99%). Though since the pandemic onset house values are up 51% vs. just 26% for units.
After a significant revaluation of space favouring house values since the onset of the pandemic, affordability pressures, as well as the rejuvenation of city living has left home price growth at the national level across property types broadly comparable over the past two years.
However, this trend differs across the capitals. In the past year house price growth (4.90%) has outpaced unit price growth (3.28%) in Sydney, the same is true in Canberra, though the opposite is true in Brisbane where unit prices have lifted 16.79% vs. 11.82% for houses in the same period.
Markets in regional Queensland, SA and WA continue to record strong growth.
Interest rates remain at higher levels, and home prices have risen significantly in recent years while growth in household incomes has not kept up with these increases, as a result affordability has deteriorated to its worst on record.
Generally, more affordable regions have outperformed over the past year, with strength in homebuying demand buoyed in these regions as buyers push down the value chain.
Townsville and Central Queensland are amongst the cheapest markets in the country with median home values remaining below $500,000 in each region. Likely a contributor to the surge in prices over the past year that has seen these regions top the rankings for the strongest annual growth to November 2024.
Perth has been the strongest performing city – and indeed the strongest performing market overall – in the past year, and regional WA the strongest regional market.
One reason Perth is one of the hottest markets in the country is its relative affordability. Despite recent gains, Perth housing values remain affordable compared to other capital cities after a decade of underperformance relative to east coast capitals, with prices now quickly rising. Low stock levels are also intensifying competition, as tight supply amid strong buyer demand has fuelled competitive conditions and strong price growth in the past year.
Housing demand remains resilient, defying affordability constraints with prices lifting across much of the country in November. However, the pace of growth remains varied with differing supply and demand conditions driving diverse performance across the country.
Over the months ahead home prices are expected to lift, though the pace is expected to remain softer trailing the strong growth in prices over recent years.
The increase in properties hitting the market this year has been met with strong demand, but increased stock for sale has been a contributor to slowing price growth, along with affordability constraints and the sustained higher interest rate environment.
Supporting price growth at present and in the period ahead, July’s tax cuts boosted borrowing capacities and buyers’ budgets, while the persistent growth in home prices is likely motivating many to overcome affordability challenges. Elevated population growth, the deterioration in rental affordability, resilient labour market and home equity gains also continue to bolster demand.
Meanwhile, building activity remains challenged, despite completions moving higher and building approvals stabilising, meaning a chronic shortage of housing remains.
As a result, prices are lifting across much of the country and despite slowing, price growth is expected to remain positive.
Once interest rates begin to fall next year, affordability will ease slightly, bolstering confidence and fuelling activity among potential buyers.
* The PropTrack Home Price Index measures the monthly change in residential property prices across Australia to provide a current view on property market performance and trends. PropTrack Home Price Index uses a hybrid methodology combining repeat sales with hedonic regression. The repeat sales method matches resales of the same property while the hedonic regression estimates values based on the value of similar properties. The hybrid model allows two properties in the same Australian Bureau of Statistics Statistical Area 1 (SA1) region, of the same type, to be matched and controls for differences in property characteristics, as in a hedonic regression. The PropTrack Home Price Index is a revisionary index with the whole back history updated monthly with current transaction information.
** This report uses realestate.com.au internal data and data sourced from third parties, including State government agencies. It is current as at the time of publication. This report provides general information only and is not intended to constitute any advice and should not be relied upon as doing so. If you wish to cite or refer to this report (or any findings or data contained in it) in any publication, please refer to the report as the ’PropTrack Home Price Index Report – November 2024’. See report for Copyright and Legal Disclaimers.
