Home Price Rebound Hits Record Amid Economic Worry

National home prices have climbed by a record 0.36 per cent in October, recovering to peak levels across the country and in most major markets, according to property market monitor PropTrack.

Nationally, home prices have now risen 4.93 per cent in the past year.

Sydney prices were up 0.37 per cent and have recovered last year’s falls. Annually, the country’s most populous city has recorded a 7.51 per cent increase.

Perth has recorded the biggest annual increase. In the West Australian capital prices rose by 0.52 per cent in October and have surged 10.9 per cent in the past 12 months.

It was the city’s 16th straight month of growth, after bucking the falling price trend experienced in most markets for much of last year.

While Melbourne prices grew 0.28 per cent in October, and are up 0.64 from levels a year ago, they are still 3.9 per cent below their peak in March of 2022.

The volume of new listings hitting the market has risen over the spring selling season and PropTrack said the demand for housing had remained strong.

“Strong demand stemming from the rebound in net overseas migration, tight rental markets and limited housing stock has offset the impacts of substantial rate rises and the slowing economy,” PropTrack senior economist Eleanor Creagh said.

Creagh said that at the same time home building approvals had declined, hitting decade lows earlier this year. 

▲ PropTrack data shows Darwin was the only capital to fall in October.

“The sharp rise in construction costs, compounded by costly delays arising from labour and materials shortages, has slowed the completion of new homes,” she said.

All capital cities, except Darwin, notched price rises in October.

Prices in the combined capital cities set a record high in October and are outperforming regional markets this year. However, the pace of growth in regional markets has increased—up by 0.32 per cent—after lagging much of this year. 

“Despite a weaker outlook for the economy, population growth is rebounding strongly and this looks set to continue,” Creagh said.

“Interest rates may rise further but they are likely close to, if not at their peak.

“Together with a shortage of new home builds and challenging conditions in the rental market, home prices are expected to rise further.”