Key takeaways
National home prices lifted 0.18% to a new peak in June, despite recording the slowest pace of monthly growth since December 2022.
Prices are up 10.14% from their December 2022 low, lifting 3.14% year-to-date to sit 6.55% above June 2023 levels.
Price growth slowed in the combined capital cities yet rose by 0.22% to reach a new peak in June, marking a 6.91% increase year-on-year. However, performance has varied as conditions differ across the capitals.
Over the past quarter, every capital saw a slowdown in home price growth, as Perth (+0.65%), Brisbane (+0.50%) and Adelaide (+0.45%) recorded the strongest growth in June. Meanwhile Melbourne (-0.43%), Hobart (-0.21%), Darwin (-0.11%), and Canberra (-0.05%) were weakest, indicating mixed performance.
Perth, Adelaide and Brisbane have recorded the fastest pace of growth for much of the past two years, with Perth prices up 22.52% in the past year, while Adelaide and Brisbane have grown 14.61% and 14.14% respectively.
Capital city prices have outpaced regional areas over the past year and did so in June despite slowing growth. Prices in the combined regions rose 0.07% to be 5.61% above June 2023 levels, as regional WA (+0.59%) and regional Queensland (+0.24%) led growth in June.
National home prices lifted 0.18% to a new peak in June, according to PropTrack's National Home Price Index, despite recording the slowest pace of monthly growth since December 2022.
According to PropTrack's data, with housing supply unable to meet demand, national home prices have cycled through 18 consecutive months of growth to hit a fresh peak in June despite the pace of growth slowing as winter begins.
More broadly, prices are up 10.14% from their December 2022 low, lifting 3.14% year-to-date to sit 6.55% above June 2023 levels.
Ms Eleanor Creagh, PropTrack's Senior Economist commented:
“National home prices have cycled through 18 consecutive months of growth to hit a fresh peak in June despite the pace of growth slowing as winter begins.
Although the number of homes hitting the market this year has lifted, strong population growth, tight rental markets and home equity gains continue to bolster demand.
Meanwhile, building activity remains challenged, resulting in the chronic shortage of housing being exacerbated by a lack of new construction.
Interest rate stability has sustained buyer and seller confidence, while the continuous rise in home prices is motivating many to overcome affordability challenges and transact with the expectation of further growth.
As a result, demand is outpacing supply, pushing prices and rents higher and offsetting the higher interest rate environment.
From July, tax cuts will lift household incomes increasing borrowing capacities and buyers’ budgets, further supporting price growth.
Although home prices are expected to rise in the coming months, they will likely maintain a slower pace through the seasonally quieter winter period, particularly with increasing uncertainty around interest rates.”
Homebuying demand remains robust fuelling further price increases
PropTrack's data highlights that national home prices increased for the 18th consecutive month lifting 0.18% in June as the home price upturn remains in play.
However, the pace of growth has eased steadily since the end of the summer selling season.
Ms Creagh further commented:
"Despite a rise in the number of homes for sale this year, strong population growth, tight rental markets, and home equity gains are all contributing to demand, whilst the supply side of the housing market has fallen short and as a result, home prices reached a fresh peak in June as robust demand has continued to push prices upwards.
The stable interest rate environment has also been a driver of confidence among buyers and sellers, while ongoing home price rises are likely incentivising many to overcome affordability challenges and transact with the expectation of further growth."
Outlook
Home prices in 2023 remained resilient to the higher interest rate environment and this improvement in conditions that materialised in 2023 has continued in 2024.
Ms Creagh explained...
"The stable interest rate environment has likely been a driver of confidence among buyers and sellers, and with housing supply unable to meet demand across the country, home prices reached a fresh peak in June as robust demand has continued to push prices upwards.
Though in every capital city the pace of home price growth has slowed compared to earlier in the year.
Higher interest rates and inflation are squeezing household budgets, and the outlook for interest rates has become less certain, but property prices are expected to lift further in the months ahead, with housing demand buoyed by population growth, tight rental markets, and home equity gains.
Further, ongoing home price rises are likely incentivising many to overcome affordability challenges and transact with the expectation of continued growth.
Meanwhile, building activity remains challenged, resulting in the chronic shortage of housing being exacerbated by a lack of new construction.
As a result, demand is outpacing supply, pushing prices and rents higher and offsetting the higher interest rate environment.
Despite some easing in the rate of population growth and more stock on market, home prices are expected to lift further in the months ahead.
From July, tax cuts will lift household incomes increasing borrowing capacities and buyers’ budgets, further supporting price growth.
Although home prices are expected to rise in the coming months, they will likely maintain a slower pace through the seasonally quieter winter period, particularly with increasing uncertainty around the outlook for interest rates.
Performance has varied as conditions differ across the capitals, and this is expected to remain the case. The smaller capital city markets, Perth, Adelaide, and Brisbane are likely to maintain their outperformance despite growth slowing as low stock levels intensify competition amid strong buyer demand, while Hobart and Melbourne continue to see weaker price momentum."
