The PropTrack Home Price Index shows national home prices have cycled through 16 months of consecutive growth after lifting 0.23% to hit a new record in April. Prices are now 6.60% above April 2023 levels.
Strong population growth, tight rental markets, low unemployment, and home equity gains are stimulating housing demand.
Meanwhile, the supply side of the housing market has fallen short in responding to substantial demand and building activity is at decade low levels, exacerbating the housing supply shortage.
This imbalance between supply and demand is offsetting the higher interest rate environment and impact of affordability constraints with home prices continuing to lift.
Download the PropTrack Home Price Index - April 2024 report in full.
National home prices increased for the 16th consecutive month lifting 0.23% in April as the home price upturn remains in play.
Strong population growth, tight rental markets, low unemployment, and home equity gains are all contributing to demand, but the supply side of the housing market has fallen short and as a result, home prices reached a fresh peak in April as robust demand has continued to push prices upwards.
The stable interest rate environment has also been a driver of confidence among buyers and sellers.
Although higher than expected inflation in the March quarter has pushed back the expected timing of rate cuts most still expect that the next move for interest rates will be down. However, the timing remains uncertain.
Capital city markets led 2023’s price upturn while prices in regional areas were slower to recover.
This trend has continued in 2024 and although home price growth in regional areas outpaced the combined capitals in April, prices in the combined capital cities have outpaced regional areas year to date.
Home prices in the combined capital cities are up 2.02% year to date after climbing 0.21% in April to a fresh price peak, while prices in regional areas lifted by a larger 0.30% in April to also set a fresh record, now up 1.85% year to date and up 5.07% on April 2023 levels.
All capitals, except Melbourne (-0.10) and Hobart (-0.24%), saw prices rise in April, though the pace of growth has slowed since March in all cities except Darwin.
Perth has maintained its streak of relative outperformance and was the strongest market in the country for monthly (+0.83%) and annual (+20.16%) home price growth. Prices surged 0.83% in April marking the 21st consecutive month of growth.
Supporting home prices, buyers in Perth are facing close to record-low choice with total stock on market falling close to 30% over the past year. Although housing affordability has declined significantly as interest rates have risen, WA remains the most affordable state across Australia, which is likely supporting prices as well.
After record growth in Perth over the past year median home values have lifted meaning homes in Perth are now more expensive than in Hobart for the first time since 2019.
After Perth, Adelaide (+0.55%), Sydney (+0.25%) and Brisbane (+0.23%) saw the strongest growth.
Throughout the past year smaller capitals have outperformed, and this trend persisted into April with Perth and Adelaide recording the fastest monthly growth in April.
Perth, Adelaide and Brisbane remain the strongest markets over the past year with prices 20.16%, 13.99% and 12.82% above April 2023 levels, respectively. Year to date these capitals are also the strongest with prices up 5.19% in Perth, 3.75% in Adelaide and 2.92% in Brisbane.
The relative affordability of these cities homes, population growth, and very tight rental markets are supporting home values, while low stock levels are intensifying competition amid strong buyer demand resulting in a sellers’ market with home prices continuing to rise at a fast pace in 2024.
Persistent strong growth in Brisbane has pushed up dwelling values in Brisbane to outpace Melbourne, with Brisbane’s median value sitting at $818,000 surpassing Melbourne for the first time in 14 years, with the pace of home price growth in Brisbane more than 10 times as fast as growth in Melbourne year to date.
In Sydney and Melbourne increasing confidence among sellers has seen the flow of new listings hitting the market this year surge, improving choice for buyers.
Despite the increase in new listings hitting the market in Sydney, buyer demand has kept up and Sydney home prices lifted 0.25% in April to a fresh price peak, though the pace of growth has begun to slow since the strong growth seen in the first quarter of 2024.
Melbourne home prices fell by a slight 0.10% in April though remain up 1.10% year-on-year. Prices in Melbourne remain 3.39% below their March 2022 peak with price recovery lagging behind that of Sydney and Brisbane, where prices fully recovered from 2022’s falls last year. Melbourne remains ahead of Hobart and Canberra, with prices up 2.02% from the January 2023 low.
Although selling activity has slowed across the country after Easter, in March 2024 total listings in Melbourne were 12.8% higher than in March 2023. Buyers in Melbourne have consistently enjoyed more choice relative to other markets with the total number of properties listed for sale sitting above the decade average since mid-winter.
After climbing in February and March, home prices in Melbourne have fallen in April, a stark contrast to the other major capital cities. Likely a reflection of the more balanced market conditions with buyers in Melbourne having much more choice than is typically the case.
Prices in Hobart continued to fall in April, declining 0.24% to now sit 1.98% below levels seen this time last year. Hobart remains the weakest capital city market when comparing annual price growth (-1.98%), as well as the change from peak (-8.54%). However, this comes after several years of outperformance, as well as strong growth during the pandemic which has seen affordability deteriorate. Home prices in Hobart are still up 35.4% since March 2020.
House prices have grown more quickly over the past year and are now 6.79% higher than a year ago, while unit prices are up 5.67% on their year ago levels.
This continues the trend seen throughout the pandemic - house values have experienced rapid growth up 44.2% on pre-pandemic levels, while the growth in unit values has been more moderate up just 21.7% on pre-pandemic levels.
The growth in home values over the past few years has been a tale of a two-speed market and while houses typically command a premium over units, and over the long run houses tend to outperform units with respect to price growth, since the onset of the pandemic, house price outperformance reached historic extremes.
The impact of the pandemic on housing preferences played a part here.
In April prices for detached houses nationally grew 0.22% in the month while unit prices grew 0.29%. This growth brings house prices nationally up 1.92% year to date, with unit prices up 2.21% with the unit market starting 2024 on a slightly stronger footing.
Housing affordability has deteriorated significantly as interest rates have risen and the apartment market offers a relative discount.
Strong demand for inner city living post-pandemic, coupled with the rapid rate of population growth and housing supply constraints alongside the relative value units offer are likely buoying buyer demand and pricing in the apartment market.
WA regions account for six of the top 10 fastest growing regions in the past year, with Northern Adelaide, Townsville and parts of southern and western Brisbane making up the remainder.
Perth has been the strongest performing city – and indeed the strongest performing market overall – in the past year, and regional WA has been only just behind regional SA as the second-strongest regional market.
Home prices in 2023 remained resilient to the higher interest rate environment and this improvement in conditions that materialised in 2023 has continued in 2024.
The stable interest rate environment has likely been a driver of confidence among buyers and sellers, and with housing supply unable to meet demand across the country, home prices reached a fresh peak in April as robust demand has continued to push prices upwards.
Though the pace of home price growth has slowed since March in every capital city except Darwin.
Higher interest rates and inflation are squeezing household budgets, and many remain concerned about the economic outlook, but property prices are expected to lift further this year, with housing demand buoyed by population growth, tight rental markets, resilient labour market conditions and home equity gains, alongside the stable interest rate environment.
Meanwhile, the supply side of the housing market has fallen short in responding to substantial demand. Building activity is at decade low levels, exacerbating the housing supply shortage.
This imbalance between supply and demand has offset the higher interest rate environment and deterioration in affordability and is expected to continue to do so fuelling further price rises.
Although higher than expected inflation in the March quarter has pushed back the expected timing of rate cuts most still expect that the next move for interest rates will be down. However, the timing remains uncertain.
As a result, prices are expected to lift further in the months ahead, though it’s likely the pace of growth will continue slowing as the seasonally quieter winter period approaches, particularly in tandem with rate cut expectations being pushed further out.
The smaller capital city markets, Perth, Adelaide and Brisbane are likely to maintain their outperformance despite growth slowing as very low stock levels intensify competition amid strong buyer demand.
Methodology: 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 2023’. See report for Copyright and Legal Disclaimers.
