Home price growth hits a fast track in February

This represents a new peak, indicating that buyer demand has kept up with supply as vendors have increasingly shown their willingness to test the market.

The figures put national prices up 0.82 per cent for 2024 so far and 6.15 per cent higher than this time last year, indicating that they are rising at a pace equal to that of July 2022.

All capital cities except for Hobart saw prices rise in February. Prices in the combined capital cities rose 0.48 per cent and are now 7.06 per cent higher than 12 months prior.

Moreover, Brisbane has hit a new milestone, with values rising 60 per cent since the onset of the pandemic to equal the price of homes in Melbourne.

In February, however, the South Australian, Western Australian, and NSW capitals experienced the strongest pace of growth, with Adelaide up 0.81 per cent, Perth rising 0.56 per cent, and Sydney up 0.55 per cent – the largest monthly increase for the Harbour City since August 2023.

From a 12-month perspective, Perth, Adelaide, and Brisbane were the strongest markets, recording rises of 16.2 per cent, 12.8 per cent, and 12.2 per cent, respectively.

Regional areas saw an increase of 0.36 per cent in February, taking the annual increases to 3.90 per cent. Regional South Australia and regional Queensland were the primary drivers of that growth with prices up 1.1 per cent and 0.8 per cent, respectively.

PropTrack senior economist and the report’s author Eleanor Creagh noted that February’s figures show that price growth has kicked up a gear in 2024.

“The slowdown in home price growth recorded toward the end of 2023 has reversed this year, with prices hitting a new peak in February,” Ms Creagh said.

“More homes have hit the market this year, but demand has kept up with that increase. The expectation that interest rates will fall in the second half of 2024 is likely providing a positive tailwind for activity.

“Housing demand is also being buoyed by population growth, tight rental markets, resilient labour market conditions and recent home equity gains. Meanwhile, the sharp rise in construction costs and labour and materials shortages have slowed the delivery of new builds, hampering the supply of new housing.”

Looking ahead, the economist predicted that strong momentum for housing demand and a slowdown in the completion of new homes will likely offset the impact of reduced affordability and a sluggish economy.

“As a result, prices are expected to lift further in the months ahead,” she said.