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According to the latest House Price Report December quarter released by property marketplace Domain, the nation’s housing market has made a full recovery from the 2022 downturn as combined capital house and unit prices closed out 2023 at a record high.
Most of the capital cities saw recovery during the December quarter with the exception of Melbourne, which is expected to see a complete recovery during 2024, the report found.
Taking the lead in median house price growth in 2023 was Adelaide with an increase of 12.7 per cent from 2022, followed by Perth (11.9 per cent) and Sydney (10.6 per cent). Meanwhile, median house prices decreased in Canberra (4.6 per cent), Hobart (2.5 per cent), and Darwin (1.2 per cent).
Sydney took the top spot for record-high median prices by the end of 2023 at $1,595,310, followed by record highs from Brisbane ($888,285), Adelaide ($875,034), and Perth ($742,390), with Canberra, Brisbane, and Adelaide unit prices also at record highs of $625,597, $524,202, and $484,407, respectively.
Domain chief of research and economics Dr Nicola Powell commented: “While stretched affordability, cost-of-living pressures and high-interest rates were expected to put a lid on property prices in 2023, the undersupply of new homes, cost-to-build blowouts, a growing population and a tight rental market continued to boost housing demand.
“This led to new record prices for combined capital houses and units by the end of 2023, which broke the previous records that we saw in March 2022 for houses and December 2021 for units.
“What the latest data is telling us is that the prices are still rising, but the pace of growth is slower than what it was in the early stage of the recovery. This pace is driven by new stock coming into the market, easing the competition, but not enough to halt price growth.”
Dr Powell added that high interest rates will continue to put pressure on mortgage affordability and limit borrowing capacity in the short term and an interest rate cut in the second half of 2024 should result in increased demand, driving upward price pressures on the housing market.
“On a more positive note, the tax cuts in July may alleviate some of the cost-of-living pressures and inflation is easing, which may help improve mortgage affordability,” Dr Powell said.
Furthermore, a report released from Oxford Economics Australia outlined that property prices will rise by 2.7 per cent in the combined capitals over the remainder of the 2024 financial year.
[RELATED: House prices will continue to grow in 2024, economists forecast]
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