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According to Domain, only about $2,000 separates house prices from reaching a new record by the end of the year, marking a recovery from the 2022 downturn.
The recovery has progressed through its third quarter of growth for houses and the second for units, with increases of 1.9 per cent and 1.8 per cent, respectively, over the September quarter.
This shift followed 10 consecutive months of decline, resulting in an 8.4 per cent decrease in property prices from their peak to the trough in January 2023.
This report coincided with CoreLogic and PropTrack data, which showed that house prices are approaching recovery, and listings are increasing.
While property prices have continued to rise since January, the pace of quarterly growth has slowed by roughly one-third compared to the previous quarter, particularly for houses.
Domain’s chief of research and economics Nicola Powell noted that September’s quarter confirmed that all Australian capital cities are either in recovery or at a price peak.
These record-high numbers can be attributed to several factors, including interstate migration, record levels of overseas migration, a tight rental market and a chronic undersupply, she said.
However, Ms Powell cautioned the pace of growth is currently being “somewhat contained by the stretched affordability”.
“If mortgage rates weren’t as high as they currently are (5.98 per cent for a new owner-occupied home loan), price growth would be faster with the current housing undersupply,” Ms Powell said.
“So for buyers who are in the position of considering purchasing, it is important to weigh up the pros and cons of delaying their purchasing timing along with financial planning.”
Indeed, there is a growing number of buyers waiting for prices to drop, as indicated by a recent Dye & Durham report.
During the last quarter, options for buyers have also expanded as sellers regain market confidence and pent-up supply begins to make an impact.
September’s auction volumes reached a 16-month high and the total national supply is now 5.1 per cent above July’s low (6.5 per cent higher across the combined capitals), with new listings in Sydney, Melbourne, Canberra and Hobart showing annual increases.
While sellers have regained some confidence in listing their properties, the Dye & Durham report also noted a growing number of sellers eager to hold out for prices to continue rising.
Capitals bouncing back
Across the capital cities, house prices in Sydney and Brisbane are expected to fully recover from the 2022 downturn, reaching new records, as indicated by the report.
Sydney ($1,578,099) and Brisbane ($848,752) are on track to achieve record-high house prices by the end of 2023.
Adelaide, Perth and Sydney recorded the highest gains in house prices over the September quarter.
Perth ($713,811) and Adelaide ($844,654) have reached record-high house prices, while Brisbane ($495,143) and Adelaide ($466,379) are the only cities with record-high unit prices.
Adelaide is currently the best-performing capital city for houses and units, providing home owners with the fastest quarterly gains. It is also the only capital city with record-high house and unit prices.
Both Adelaide and Perth’s house prices have reached a record high.
Meanwhile, Melbourne has now become the second most expensive city in which to purchase a unit ($573,067), surpassing Canberra for the first time since March 2022.
[Related: Aussies wait for market conditions to shift before buying]
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