House prices defy Reserve Bank‘s big call: REIA

There's lots of talk about property values plummeting, but what's really going on?

The Real Estate Institute of Australia (REIA) President, Mr. Hayden Groves confirmed that their latest Real Estate Market Facts found that Australian housing prices fell over the June quarter as rising interest rates and inflation impacted affordability, but not all cities and regions are experiencing price contractions.

While the June quarter of 2022 saw a decline in the weighted average capital city median price for both houses and other dwellings across the Australian residential property market, the weighted average capital city median price decreased by 1.8% for houses and 0.6% for other dwellings.

Now that's not a property crash is it?

Here's what the REIA stats showed:

• The weighted average median house price for the eight capital cities fell to $1,012,230 over the quarter.
• The median house price increased in Brisbane, Adelaide and Darwin remained stable in Perth and declined in Sydney, Melbourne, Canberra and Hobart.
• Increases ranged from 0.4% in Darwin to 2.6% in Adelaide
• At a median sale price of $1,552,015, Sydney’s median house price continues to be the highest amongst the capital cities, 53.3% above the national median.

This defies the Reserve Bank’s latest comment on potential house price falls and simply demonstrates the current market conditions are the adjustment ‘we had to have’.

At $530,000, Perth offers great value with the lowest median house price across Australian capital cities, 47.6% lower than the national median.

Over the 12 months to the June quarter, the weighted average capital city median house price increased by 9.2%.

Whilst a significant gain, this is the lowest annual increase since the December quarter 2020.

According to Mr. Groves, the weighted average median price for other dwellings for the eight capital cities dipped to $651,142, a quarterly fall of 0.6%.

Over the quarter, the median price for other dwellings rose in Brisbane, remained stable in Adelaide, Canberra and Darwin and declined in Sydney, Perth, Melbourne and Hobart.

• Also read:Perth housing market update | September 2024
• Also read:Sydney housing market update | September 2024
• Also read:Latest property price forecasts for 2024 revealed. What’s ahead in our housing markets in the next year or two?
• Also read:Melbourne housing market update | September 2024
• Also read:Australian housing market update [CoreLogic’s video] | September 2024

“At $790,983, Sydney’s median price for other dwellings continues to be the highest amongst the capital cities, 21.5% higher than the national median.

At $410,000 Perth has the lowest median price for other dwellings across Australian capital cities, 37.0% lower than the national median.

“Over the 12 months to the end of June, 2022 the weighted average capital city median price for other dwellings increased by one percentage point,” he said.

Mr Groves said rents increased sharply after a period of relative stability with the weighted average median rent for 3-bedroom houses in the eight capital cities inflating to $506 per week, a quarterly rise of 3.6%.

“The median rent for 3-bedroom houses increased in all capital cities over the quarter, except Melbourne where it remained stable.

During the quarter, the weighted average median rent for 2-bedroom other dwellings increased to $474 a week, a quarterly rise of 5.4%.

The median rent increased in all capital cities over the quarter except in Adelaide and Hobart where it remained stable.”

Mr Groves said vacancy rates have dropped in most cities with Melbourne also falling but still recording the highest at 4.6% while Adelaide has the lowest at 0.4%.

“With weekly median rents for 3-bedroom homes rising 11.7% in twelve months, the data points toward rental affordability remaining the most significant challenge facing the housing sector for the foreseeable future.”