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Home price correction in rear view as property values rise further in April | PropTrack Home Price Index - featured image

Home price correction in rear view as property values rise further in April | PropTrack Home Price Index

key takeaways

Key takeaways

National home prices increased in April, rising 0.14% according to the latest PropTrack Index.

The cumulative increase in 2023 is now 0.75%.

Sydney (+0.40%), Adelaide (+0.41%) and Perth (+0.21%) recorded the largest increases in April, while Hobart (- 0.27%), Canberra (-0.17%) and Melbourne (-0.11%) experienced slight price falls.

Sydney, the market which led the downturn, is now leading the recovery.
Sydney home prices are up 1.68% year to date. With the bounce, Melbourne has overtaken Sydney in terms of annual price falls.

Canberra and Hobart have seen the largest annual declines, while Adelaide is the strongest performer.

In recent months, home price growth has been stronger in the combined capital cities than in regional areas. This trend continued in April, with regional areas flat and capital city prices lifting 0.20%.

Except for WA, capital city markets are outperforming their regional counterparts on a monthly basis in every state.

However, regional markets outperformed capital city markets throughout much of the past year and have recorded stronger annual growth in every state.

After declining for most of last year, home prices have started to increase again in 2023, with April marking the fourth consecutive month of rises nationwide, according to the latest PropTrack Home Price Index. 

Proptrack Home Price Index April 2023

This is due to factors such as strong migration, limited supply, and tight rental markets, which are offsetting the impact of rapid interest rate hikes.

Although supply constraints have eased somewhat in terms of the total stock on the market, the number of new listings remains low, which keeps prices from falling further.

Additionally, the Reserve Bank's decision to maintain the cash rate in April likely contributed to the increase in home values by boosting confidence in future borrowing costs.

According to Proptrack, despite recent stabilization, there are still challenges on the horizon, including the possibility of further interest rate increases and an expected slowdown in the economy.

However, the tight labour market, strong housing demand, and limited supply are expected to keep the recovery going.

Moreover, high construction costs exacerbating the shortage of homes, combined with population growth, are likely to support home values.

Annual Change In Home Prices


PropTrack report that in April, Sydney's home prices increased for the fourth month in a row, rising by an additional 0.40%.

Among the capital cities, Sydney had the second-highest increase in home prices last month.

While Sydney experienced the largest drop in home prices, declining by 7.20% from its peak, it is now leading the recovery, with a 1.68% rise year-to-date.

This is due to various positive demand drivers, such as rental supply shortages and a rebound in international migration.

Moreover, the ongoing low volume of new listings is also preventing prices from falling further.


Although home prices in Melbourne increased during the first few months of the year, they experienced a slight decline of 0.11% in April according to PropTrack.
However, with the end of interest rate tightening in sight, buyers' uncertainty regarding their borrowing capacities and mortgage servicing costs will likely dissipate.
Moreover, the rebound in immigration and tight rental markets will generate sufficient buyer demand to keep prices resilient.


PropTrack report that Brisbane's home prices have increased for four consecutive months, with a 0.14% rise in April, thanks to strong housing demand, which has counteracted the decline in affordability.

The sustainability of this stabilization, or a potential return to price declines, will depend on the supply level and the trend of interest rates.

Additionally, Queensland currently has the fastest-growing population in Australia, and new supply may struggle to keep up with the rising demand, further supporting home values.



Perth's home prices reached a new peak in April according to PropTrack, following a 0.21% increase.

This market, which is relatively affordable, has fared better than other capital cities over the past year, with prices rising by 3.11%.

After Darwin, Perth is the second-most affordable capital city market in terms of dwelling values.


In April, Adelaide's home prices reached a new peak, with a 0.41% increase, which was the strongest monthly pace of price growth in the country.

Over the past year, Adelaide has maintained its position as the strongest-performing capital city market, with home prices increasing by 5.23%.

The comparative affordability of homes in the city has resulted in better price stability amidst the rapid increase in interest rates.

Additionally, low stock levels are helping to protect home values, with greater competition among potential buyers.


Hobart's home prices have continued to decline this year, following several years of relatively strong performance according to the PropTrack Index.

In April, home prices in Hobart decreased by 0.27%, making it the fastest-declining capital city market for the month.

Unlike other capital cities, listing volumes in Hobart are less constrained, providing buyers with greater options and removing significant support for prices.


In April, home prices in Darwin rose by 0.11%, bringing them to just 0.83% below their level in April 2022.


Canberra's home prices fell by 0.17% in April, bringing them to 6.34% below their level in April 2022.

As a result, Canberra has become the worst-performing market over the past year.


Although interest rates have been the primary factor driving home price falls for much of 2022, other factors also play a role in home price growth and distribution across the country according to the latest PropTrack Home Price Index report. 

Despite the decrease in affordability, larger price drops have not materialized due to the counterbalancing effect of strong housing demand and tight supply conditions.

The Reserve Bank's decision to maintain interest rates has also contributed to the continued increase in home values this month.

With the reduction in uncertainty regarding borrowing capacities and mortgage servicing costs, buyers have been able to adjust to the higher interest rate environment and proceed with their purchasing plans.

Furthermore, despite some easing of constraints on total stock available on the market, the flow of new listings is still relatively low.

This means that fewer properties are being listed for sale compared to the same period last year, creating a more competitive buying environment that is helping to support home values.

Ms Eleanor Creagh, PropTrack's Senior Economist commented:

"The path for home prices in the months ahead will be influenced by many opposing factors, including the level of supply hitting the market alongside the trajectory of interest rates.

Headwinds remain with the full impact of rate rises already delivered yet to be felt and the possibility of further tightening still in play.

There is a risk that the Reserve Bank raises interest rates further than expected, which could see the decline in prices finding a second wind.

However, it is likely the bottoming process will continue, with the bounce in home prices firming and values stabilising as uncertainty eases.

A home shortage exacerbated by high construction costs and industry challenges will also underpin values as the population grows.

Positive demand drivers stemming from the shortages in rental supply and rebound in international migration also remain, alongside ongoing tightness in the labour market, promoting a sense of job security.

A slow increase in wages growth will also maintain housing demand against a backdrop of tight supply.

When market participants feel more confident, they are more likely to transact and make long-term financial commitments, increasing housing demand."

About Brett Warren is National Director of Metropole Properties and uses his two decades of property investment experience to advise clients how to grow, protect and pass on their wealth through strategic property advice.
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