Rate Rises Fail to Stifle Home Price Rebound

Home prices have continued to rebound, rising for the past six months despite a string of rate increases since May last year.

According to the PropTrack Home Price Index, home prices have risen nationally to be just 0.1 per cent lower than a year ago.

In the capital cities, prices were up 0.41 per cent in June to sit 0.06 per cent higher than a year ago, with all capitals apart from Darwin and Hobart recording a monthly uptick.

From December 2022, prices in capital cities are now up 3 per cent and are 0.06 per cent above last year’s levels. 

For the capital cities, price increases were led by Sydney (0.63 per cent), Adelaide (0.45 per cent) and Perth (0.34 per cent).

Melbourne (0.24 per cent), Brisbane (0.08 per cent) and Canberra (0.11 per cent) also recorded increases, while Hobart and Darwin were the only capitals to have decline, down 0.36 per cent and 0.08 per cent respectively.

Adelaide and Perth had the strongest annual growth, up 5.27 per cent and 5.69 per cent respectively on June 2022 levels. 

PropTrack Home Price Index June 2023

▲ Source: PropTrack

Regional areas had comparatively more subdued price growth throughout 2023, up 0.05 per cent in June to be 0.55 per cent lower year-on-year. 

However, prices regionally held up better in 2022 in that prices have not fallen as far as in capitals. 

“The 2023 house price recovery continued in June, despite the Reserve Bank lifting the cash rate for the 12th time since May last year,” PropTrack economist Angus Moore said.

“Interest rates will continue to be a headwind for prices but, unlike in 2022, the peak of interest rates is likely close.

“Higher interest rates are being offset by a limited flow of new properties hitting the market, as well as strong fundamentals for housing demand.

“While the total number of properties listed on realestate.com.au has picked up compared to a year ago, the flow of new properties hitting the market remains subdued, which is creating a more competitive environment for properties coming to market.

“With auction clearance rates strong, and fewer properties hitting the market during winter, price growth is likely to continue in the near term, despite the potential for further interest rate increases.”