DESPITE HIGH INTEREST RATES, AUSTRALIAN REAL ESTATE PRICES ARE STILL SOAPING

New statistics have shown significant growth in the Brisbane, Adelaide and Perth areas, many suburban areas increased by more than 15%, especially Sydney increased by 7.5%.

Image: Brendon Thorne/Getty Images – Property prices in Sydney have increased by 7.51% over the past 12 months, with five areas in Perth increasing more than 15%.

According to two data organizations, real estate prices in Australia have increased to record levels in some major cities due to limits on the number of transactions and the combination of population growth factors that have increased interest rates. than.

New statistics show significant growth in Brisbane, Adelaide and Perth, recording greater than 15%. Along with that, real estate prices in Sydney increased by 7.51% over the same period.

Nationwide home prices increased 0.36% in October, bringing total growth for 2023 to nearly 5%, PropTrack reported. In Sydney, Perth, Adelaide and Brisbane all are at record levels.

Image: Graph showing annual changes in property values across Australian states.

“We have seen real estate prices nationwide increase for 10 consecutive months” as Ms. Eleanor Creagh, senior economist at PropTrack, shared. “This is really worrying for people who have never participated in the real estate market.”

Data provider CoreLogic said that in October alone, the national home value index increased by 0.9% compared to 0.7% in September. That is, this number is an increase of 7,000%. 6% from the bottom in January, 0.5% from the highest level recorded in April 2022.

“We are now seeing increasingly diverse capital growth performance across capitals,” said Eliza Owen, head of residential research at CoreLogic.

“Sydney and Melbourne are more relaxed. Hobart, Darwin and Canberra are flat or down in recent months and continue to fall significantly year-on-year,” Owen said. “But when you look at Brisbane, Adelaide and Perth – these cities are performing completely differently with [price] growth rates in excess of 1% per month, very low supply, peak values and no signs of slowing down.”

The rise in property prices in 2023 has surprised many analysts, despite the Reserve Bank raising interest rates the fastest in three decades, including four rate hikes in 2023, before pausing in the last four months.

Most economists predict another interest rate hike will take place next Tuesday, CoreLogic and PropTrack expect the real estate market fever to subside significantly.

A recovery in new listings – including increases of 10.7 per cent in Melbourne and 9.3 per cent in Sydney since early spring – will also slow price increases in some markets. The possibility of a price drop again cannot be ruled out.

“The number of new homes coming onto the market in Sydney in the last three months was about 23,000 compared to 21,000 transactions,” Owen said. “The supply and demand situation is changing.”

Creagh shared that other cities such as Perth, Brisbane and Adelaide may need more to slow the current price increases.

House prices in Australia’s West have increased by 0.52
The Perth market remains extremely competitive and the total number of apartments listed for sale in Perth continues to fall to record levels,” Creagh emphasized. “The situation is similar in Brisbane and Adelaide, where the number of apartments Listed household sales were much lower than the average over the previous decade.”

According to PropTrack, the median home value in Sydney was $1.07 million last month, 7.51 per cent higher than a year ago and 31.7 per cent higher than in March 2020, when The Covid pandemic first impacted the economy. The median value in Melbourne, $815,000, is 3.9% lower than a year ago and up 16.6% from pre-Covid levels.

The median price in Adelaide hovered at $697,000, 8.77% higher than a year ago and up a significant 55.1% from March 2020, leading the country.

CoreLogic’s average price for these three cities at the end of October was more than $1.121 million for Sydney, around $778,500 for Melbourne and touching $700,000 for Adelaide.

Perth led the way in terms of year-on-year price increases, with five regions recording growth greater than 15%. Armadale in the city’s southeast saw an average price increase of 21.5% to more than $550,000.

The next biggest growth occurred in the Marrickville-Sydenham-Petersham area in Sydney’s inner southwest, where the average price increased 14.8 per cent over the past year to almost $1.695 million.

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