Two Australian capital cities are bucking the falling home prices trend, new data shows
Australian house prices have fallen for the first time since the start of the COVID-19 pandemic, new data shows.
PropTrack’s latest Home Price Index, released today, also shows that the Canberra housing market has dipped, marking the first fall in three years. Price growth has slowed rapidly right across the country and regional areas, which have experienced a boom in recent years, were largely flat in May. PropTrack economist Paul Ryan said the national decline of 0.11% followed the first hike in interest rates by the Reserve Bank at the beginning of the month.
Slowing house price growth throughout much of 2022 was likely fueled by growing expectations that the cash rate would rise – and rise sharply. “However, it also follows the third-fastest period of property market growth in Australia's history, with prices up 14% in the year to May and 35% since March 2020,” Mr Ryan said.
“Prices adjusted quickly to the reduction in borrowing costs as the pandemic shocked the economy and interest rates fell to their lowest level on record. Growth looks to remain subdued as uncertainty around borrowing costs is resolved. “And to some extent, the 35% growth in home prices since mid-2020 could not continue indefinitely.”
But some markets are bucking the slowing trend, with Brisbane and Adelaide continuing to see solid growth in May, Mr Ryan said. Dwelling prices in the Queensland capital rose 0.35% last month, now up 25.92% over the past 12 months, the Home Price Index shows. “Parts of Brisbane, particularly peripheral parts of the city, feature prominently in the highest growth regions over the past year across the nation,” Mr Ryan said.
In the South Australian capital, home prices also rose 0.58% in May, up 24.24% annually.
“Brisbane and Adelaide are likely to continue to outperform – they have the appeal of city living with larger homes and lower prices,” he said. Some smaller capitals also saw a modest uplift in home prices, with Perth rising 0.19% and Darwin up 0.05% in May.
*Shannon Molloy, News Editor (realestate.com.au June 2022)
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