Key points:
  • Australia's national median dwelling value rises 0.6% in April, hitting a new record high of $779,817
  • Property prices continue to climb despite rate hikes as demand outstrips supply
  • Mid-sized capitals Perth, Adelaide, and Brisbane continue to lead in price growth
  • Lower value homes record stronger price increases compared to luxury properties

CoreLogic’s Home Value Index (HVI) rose by another 0.6% in April, marking the 15th consecutive month of growth. 

This brought the national median dwelling value to $779,817, approximately $4,720 higher than the month prior. 

The continuous gains have so far lifted the nation’s home values by 11.1% or about $78,000 since the steepest peak-to-trough decline when property prices bottomed out in January 2023. 

Undersupply trumps rate hikes

Triggering the record slump more than a year ago was the RBA’s aggressive interest rate hikes, which raised the benchmark rate 300 basis points higher at the time. 

This resulted in a rapid reduction in borrowing capacity and high interest costs dissuading potential buyers from entering the property market. 

Since then, the cash rates have increased by another 125 basis points, bringing it to its current peak of 4.35%. 

It has remained unchanged since November 2023. 

Interestingly, in the face of high interest rates – compounded by worsening affordability and ongoing costs of living pressures – property prices have gone up. 

“The persistent rise in housing values, despite an array of downside factors that would normally act to push prices lower, can be drawn back to the insufficient supply of housing relative to demand,” CoreLogic research director Tim Lawless said. 

The research chief also noted the stark mismatch between population growth and the number of houses built that put pressure on Australia’s housing stock. 

Over the year to September 2023 saw roughly 174,000 new dwellings completed, well below the underlying demand for around 264,000 houses (based on the 2.5% population growth the ABS recorded).

“The undersupply of well-located housing is recognised as a national crisis, however, hurdles blocking a rapid and significant housing supply response remain substantial,” Mr Lawless noted. 

The hurdles he cited included high construction and holding costs as well as tight labour supply for construction-related trades. 

Other research firms echo these findings, pointing to chronic undersupply as the reason behind the continuous rise in dwelling values.

“Despite some easing in population growth, this mismatch between supply and demand is expected to persist in mitigating the downward effects of affordability challenges and a decelerating economy,” PropTrack senior economist Eleanor Creagh said. 

“As a result, prices are expected to remain on the rise in the months ahead.”

Researchers at Domain are likewise pencilling in a continued rise in property prices due to housing scarcity.

“The shortage of new housing is likely to persist, as new dwelling approvals have dropped to a nearly 12-year low after trending downward over the past two years,” Domain chief of research Dr Nicola Powell said. 

Despite the interest rates expected to stay higher for longer with inflation coming in hotter than expected in March, along with the growing housing affordability challenges, Mr Lawless maintained the mismatch between supply and demand will continue to prop up housing values. 

“A situation that doesn’t look like it will change in the near future," he said. 

The same front-runners lead price growth

Similar to previous indices, mid-sized capitals Perth, Adelaide, and Brisbane continue to lead the pace of growth. 

Perth’s housing prices accelerated further, rising the fastest at 2% last month to bring its median home value to $721,278.

The WA capital also recorded the biggest quarterly and annual price leaps at 6% and 21.1%, respectively. 

Adelaide, where prices were up 1.3% over the previous month, has a median dwelling value of $747,732 as of 30 April.

Meanwhile, the impact of price increases on growth rate was noted in Brisbane.

Despite the 0.9% monthly gain, Brisbane’s housing prices slowed down for the first time in 12 months.

“Affordability pressures may be impacting the pace of growth across the city, following a nearly $300,000 increase in values since the onset of Covid in March 2020, the largest dollar value increase of any capital,” Mr Lawless said.

Homes in the Queensland capital are currently priced at a median value of $827,822.  

The cities’ regional counterparts likewise posted the strongest growth among regional markets. 

Regional WA (up 5.3%) led the pace of quarterly gains, followed by Regional SA (up 3.9%), and Regional Queensland (up 3.2%). 

Lower value homes record stronger growth

The latest HVI also found housing affordability drives the price increases in almost every capital city. 

Sydney’s lower quartile and broad middle of the market are showing the same quarterly change at 1.7%, higher compared with the 0.5% rise in upper quartile property prices.

The median dwelling value in Sydney currently stands at $1.146 million, 0.4% higher than a month ago. 

“The shift towards stronger conditions across lower value markets can also be seen between the housing types, with growth in unit values outpacing house values over the past three months,” Mr Lawless said.

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