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The latest Domain Home Price Report for March 2024 has revealed the fifth consecutive rise for houses and fourth consecutive rise for units, reaching another record.
According to the report, 10 historical records were broken within the first quarter of 2024.
Sydney’s median house price has exceeded $1.6 million for the first time, while Brisbane, Adelaide, and Perth also saw record high prices in houses and units.
Sydney’s house prices rose by 12.8 per cent (approximately $185,000) since the trough in December 2022, while its unit price recovery gained momentum, rising almost twice as fast over the March quarter compared to the previous quarter, with prices reaching $806,137 (up 1.9 per cent).
Nicola Powell, chief of research and economics at Domain, said that prices are expected to continue rising despite the challenges posed by cost-of-living and high interest rates.
“The upward trend is driven by various factors, including a chronic shortage of new homes, strong population growth, high building costs, and a tight rental market, all of which boost housing demand,” Powell said.
The median house price in Canberra is $1.05 million, followed by Melbourne ($1.03 million), Brisbane ($924,498), Adelaide ($902,332), Perth ($777,921), and Darwin ($573,856).
The median house price across all the combined capitals has now reached $1.1 million as of the March quarter.
“The challenging rental conditions will likely push some prospective first home buyers to fast-track their journey toward home ownership,” Powell continued.
“We expect increased demand at the more affordable end of the market, particularly for units. This trend will likely affect affordable markets such as Perth, Brisbane and Adelaide, along with units in higher-priced markets like Sydney.”
These report findings come as the latest Housing Affordability Report released by ANZ and CoreLogic found that first home buyer (FHB) activity is likely to weaken in the year ahead.
CoreLogic has estimated that it would take 10.3 years for a median income household to save for a 20 per cent deposit assuming a savings rate of 15 per cent per annum; however, with the national savings rate decreasing to 3.2 per cent in the December quarter of 2023, this presents an additional hurdle for FHBs.
“These conditions are already resulting in some weakness in the first home buyer segment. The portion of owner-occupier lending secured for new first home buyer purchases fell to 28.3 per cent in January 2024, down from a recent high of 30.1 per cent in June 2023,” the report stated.
“As the year progresses, the share of first home buyer activity is likely to weaken further.”
[RELATED: FHB activity ‘likely to weaken’: ANZ/CoreLogic]
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