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By Michael Yardney

Australia’s hot property markets showing the fastest annual rate of growth on record

Domain’s September Quarter 2021 House Price Report shows Australian house prices experiencing a historical rate of growth at 21.9 per cent.

This is the fastest annual rate of growth on record with median house prices at almost $1 million nationally.

Although house and unit price growth rate has been the fastest on record, quarterly growth is beginning to ease, indicating that the peak pace of growth has passed and buyers may experience some relief.

State of the Nation

Median house prices close in on $1 million, rising 3.5% over the September quarter to a new record high of $994,579.

House prices experience the fastest annual rate of growth on record at 21.9%.

Median houses price


House prices have risen three times faster than units over the past year.

Price relief is nearing as the rate of house price growth across capital cities halved in the quarter compared to last quarter, suggesting the peak pace of growth has passed.

Median units price


State of the Capitals

The September Domain House Price Report shows that all capital cities except Perth and Darwin hit a new record high house prices: Sydney, Melbourne, and Adelaide hit new record unit prices, Hobart maintains record unit prices.

Sydney’s median house price rose to a new record of almost $1.5 million — this is the fastest annual rate of growth on record at 30.4%.

Melbourne’s median house price rose to $1.038 million despite being in lockdown for most of the last quarter.

Canberra is now the second most expensive capital city to purchase a house for the first time since 2005.

Brisbane’s median house prices rose three times faster this quarter compared to last year, pushing the price gap between houses and units to an all-time high.

Darwin hit the highest annual house price growth in 17 years with an increase of 33.2%.

Hobart house prices have almost doubled over the past five years, the steepest increase of the capital cities.

Perth is now Australia’s most affordable capital city to buy a house and the only capital city to experience negative house price growth indicating a significant turning point in the market.

Commenting on the easing pace of growth Dr. Nicola Powell, Domain Chief of Research and Economics said,

“We’re seeing the property market begin to cool down with soaring house prices in the last year adding to ongoing affordability pressures affecting buyers participation in the market.

As COVID-19 lockdowns and restrictions come to an end and the sustained high prices appeal to vendors, sellers are beginning to re-engage with the market, increasing supply which in turn offer greater choices for buyers”.

In September, house prices rose by 3.5 per cent to a new record high of $994,579 and unit prices by 1 per cent to a new record high of $609,642 (figure 1).


Speaking to affordability constraints, Dr. Nicola Powell said,

“Domain Home Loan data reveals that there has been an increase in the average loan value over the last year indicating that customers are borrowing more to keep up with rising prices and further driving house price growth.

This may start to slow down as new serviceability measures are implemented from 1 November.

However, the sheer affordability of keeping up with rapid house price gains is proving a barrier for many buyers, especially first home buyers facing spiralling deposit goals and poor interest accrued on savings.

Upsizing is also becoming a financial leap despite the benefit of strong equity growth, and particularly challenging if sold prior to purchasing.”

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According to Domain’s House Price Report, Sydney house prices rose by roughly $6,700 a week over the past year with a total rise of just over $349,000 hitting a new record of almost $1.5 million. Sydney Suburb

This is the fastest annual rate of growth on record at 30.4 per cent, however, its quarterly growth has continued to lose momentum.

Annually, house prices have risen just over three times faster than units, a differing performance that is now starting to narrow as the pace of quarterly growth moderates.

Unit prices hit a new record high of $802,475 after gaining $18,695 over the September quarter, surpassing the mid-2017 price peak for the first time.

“With significant disparity and gap between house and unit prices, Sydneysiders are seeing greater value in units due to house price affordability constraints, as well as rising investor activity supporting increased buyer demand and rising unit prices in the last quarter.”



Despite being in lockdown for most of the quarter and price growth being persistently lower than the combined capital cities, Domain reports that Melbourne house prices hit a new record high of $1.038 million after increasing by 16.8 per cent in the past year. Melbourne Property

This is the strongest annual gain in 11 years.

Lifestyle and outer metro areas such as Mornington Peninsula and the Outer East region have the highest rates of annual price growth.

Dr. Nicola Powell says,

“Lengthy lockdowns continued to drive buyer preference to larger homes and more space.

This has resulted in house prices growing almost three times faster than units over the past year, a divergence that has created a record price gap in Melbourne.”



Domain reports that buyer demand in the Greater Brisbane property market remains strong as the number of homes sold reaches its highest point in at least six years with house prices reaching a new record high, passing the $700,000 mark.

This strong demand continues to see properties being snapped up quicker than they are listed for sale, with many areas unable to replenish sale stock quickly enough to keep up with demand. Brisbane

However, more sellers are starting to come to market with newly listed homes for sale 7 per cent higher over the first three weeks of October compared to the two-year average; this will need to continue to catch up to underlying demand.

Dr. Nicola Powell adds,

“Queensland has been the main state to benefit from the flow of Australians that have sought to either escape lockdown or embrace the remote working culture.

This newfound flexibility has allowed some to relocate elsewhere and maintain their current career trajectory and earning power.

Brisbane’s offer of relative affordability compared to other major capital cities, the lifestyle, climate and winning the 2032 Olympic bid all provide key reasons for increased internal migration and investment activity.”



According to Domain Canberra is another city that has remained resilient despite the lockdown restrictions which had little effect on deterring buyers from securing homes, with house prices hitting an all-time high at $1.07 million.

However, unit prices in Canberra dropped by 2.9 per cent over the last quarter as prices in the city have seen softer growth as unit supply and buyer preference towards houses impact.

Buyers continued to operate in a sellers’ market due to the heightened competition in securing a sale and exaggerated reduction in supply throughout lockdown weeks.

The auction market remained phenomenally strong, extending its historic run of clearance rates above 80 per cent for every month this year into recent lockdown months, hitting 89 per cent in September, the highest monthly result for the year to date.

“Canberra’s soaring housing prices reaching $1 million median house price highlights the booming property market and strong demand present, likely to represent those buyers who had previously been unable to secure a home earlier in the year.

In fact, total supply continued to shrink to a multi-year low in September.

While all regions reached a new record high house price, price growth at the upper end of the market is starting to lose momentum, suggesting price acceleration will begin to ease and suggests the price growth peak has passed.“



Adel Preview

Adelaide has experienced the strongest annual price increase by 20.1 per cent since 2008 with house prices hitting a record high at $667,888 and unit prices increased over the quarter by 5 per cent hitting another record high at $357,615.

Talking about the anticipated change in house prices, Dr. Nicola Powell said,

“Pressure still remains on buyers as demand outstrips supply and price growth remains positive.

But there are signs conditions could be changing as house price growth moderates by one-third compared to last quarter.

Buyer demand is no doubt still strong, but it is starting to ease as the number of home loans financed drops from their recent peak.”



Darwin Preview

Domain reports that Darwin house prices saw an upward trajectory showing the strongest rate of annual house price growth in 17 years and the highest median price in six years reaching $640,068.

However, like Canberra, Darwin’s unit prices dropped by 1.2 per cent in the September quarter.

“The turnaround has been driven by sharply rising buyer demand, as low-interest rates stimulate activity as well as higher household savings, returning expats and border restrictions that have helped to retain residents in Darwin.

House prices have been the main beneficiary of escalating prices, and it would take only two more quarters of the same growth to achieve a new record high.”



Hobart Preview

House prices broke records in Hobart according to Domain, edging towards the $700,000 mark for the first time and unit prices are at a record high at $532,284, an annual increase of 23.8 per cent.

Hobart was the most affordable capital to buy a house in Australia in 2019 and in a short span, property prices in Hobart overtook Darwin, Perth, Adelaide.

Hobart house prices have almost doubled over the past five years, the steepest increase of the capital cities.

Dr. Nicola Powell adds,

“The current upswing is now the strongest the city has seen in 17 years.

All price points are rising by double-digits with entry-level prices recording the strongest rates of growth.

All Hobart regions have reached a new record house price in September.

Supply continues to remain tight, new listings in September are 1% below the five-year average.

Buyers continue to absorb new listings quicker than they are listed for sale.”




Domain reports that Perth takes the title of being the most affordable capital city to buy a house with property prices falling in September for the first time in two years with house prices at $598,601 and unit prices at $363,653.

The quarterly decline in house prices signals that buyers are becoming constrained by affordability and the fear of overpaying created by the intense buying conditions.

However, Perth's sellers’ market is starting to lift, and buyer demand still remains elevated.

Dr. Nicola Powell says,

“New listings will need to continue to be strong to appease rising prices.

The number of Aussies relocating to Perth has reached its highest point in eight years - while there remains a positive inward flow into Perth, it looks to be easing but is being replaced with higher investment activity.”

Source: Read the full Domain House Price Report here

ALSO READ: The most popular suburbs for property transactions over the past year revealed

About Michael Yardney Michael is a director of Metropole Property Strategists who help their clients grow, protect and pass on their wealth through independent, unbiased property advice and advocacy. He's once again been voted Australia's leading property investment adviser and one of Australia's 50 most influential Thought Leaders. His opinions are regularly featured in the media.
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