Homebuyers across the country will have an extra spring in their step, as home price growth continues to slow while Australia enters its busiest selling period.
Home hunters will be welcoming the arrival of the spring real estate market, which typically sees an influx of new homes listed for sale.
It comes as the national median home price increased just 0.22% month-on-month (MoM) to $790,000 in August, according to the latest PropTrack Home Price Index.
National home prices were 6.16% higher than the same time last year, and 44.3% higher compared to the start of the pandemic in early 2020.
PropTrack senior economist Eleanor Creagh said national home prices had cycled through 20 consecutive months of growth, although the pace of growth had slowed in the seasonally quieter period.
“Although the number of homes hitting the market this year has lifted, strong population growth, tight rental markets and home equity gains are bolstering demand,” Ms Creagh said.
Source: PropTrack
“Meanwhile, building activity remains challenged, exacerbating a chronic shortage of housing.
“Supporting price growth, July’s tax cuts boosted borrowing capacities and buyers’ budgets, while the persistent growth in home prices is likely motivating many to overcome affordability challenges.”
Ms Creagh said housing demand remained buoyant, defying affordability constraints and pushing prices higher across much of the country.
“However, price growth differs around the country with the balance between supply and demand driving that variance,” she said.
“Home prices are expected to lift as activity ramps up into the spring selling season. However, the expected uplift in choice, the uncertainty around timing of interest rate cuts and affordability constraints are likely to dampen the pace of price growth.”
Perth home price growth outperformed the rest of the country again in August, up 0.79% compared to the previous month.
The Perth median home price value was up 23.24% year-on-year to a fresh peak of $751,000.
Perth-based real estate agent and director of Duet Property Group Michelle Kerr said sellers generally had high expectations on both price and days on market.
“The mood in the Perth property market is very buoyant with both buyers and sellers generally expecting the strength in the market to continue, albeit maybe not at the pace that we’ve seen for the last 24 months," Ms Kerr said.
“Even though sentiment is good, there is a lot of frustration generally due to the level of competition that buyers are experiencing as part of the property purchase.
“Buyers are sometimes in a position where they are competing with three, five or even 10 other buyers for the same property.”
In Adelaide, the median home price increased 0.45% MoM to a new peak of $768,000 in August, reflecting 15.12% of growth over the past 12 months.
Brisbane’s median home price was up 0.35% MoM to a fresh high of $854,000, marking a 13.95% home price jump over the past year.
In Sydney, the median home value rose 0.32% to a new peak of $1.095 million during the month of August, up by 5.83% annually.
Melbourne’s median home price went backwards in August, declining 0.18% to $797,000 MoM. Over the past year, Melbourne’s average home price was also 1.46% lower.
Despite the gloomy home price figures for Melbourne, O’Brien Real Estate corporate director Dean O’Brien said there was a silver lining for the Melbourne property market.
Mr O’Brien explained that while Melbourne home sellers were unlikely to pocket the home price gains seen in Perth and other markets lately, there were more homes available to purchase in the city.
“If you’re looking to sell now, it’s a great time because the market is so stable that you actually have choices, whether you're upsizing or downsizing,” he said.
“First-home buyers are probably enjoying the experience too because there are more opportunities for them.
“It’s the investors who are a bit disappointed because a lot of them got into the market when interest rates were low and saw significant growth in their investments.
“But now the cost of money is much higher and the cost to hold the property, along with higher land taxes and other new costs, is too much, so the landlords who are selling aren’t happy about selling.”
The smaller capital cities recorded a mix of home price results, reflecting the multi-speed make-up of the Australian property market.
In Hobart, the median home price increased 0.63% MoM to $683,000, although the median home price was 0.5% lower than the same time last year.
During the month of August, Darwin recorded a 0.27% decline in its median home price to $509,000, while recording an annual gain of 1.05%.
This Hobart home at 40 Sixth Avenue, West Moonah was sold last month for $720,000. Picture: realestate.com.au/sold
Canberra’s median home price edged 0.04% higher to $839,000 during the month, marking 0.43% of price growth over the past 12 months.
Together, the capital cities recorded combined annual growth of 6.49% in August, while the combined regional median home price posted slightly lower annual growth of 5.32%.
Regional Western Australia remained the front runner outside of the capital cities, with the median home price up 0.41% MoM and annual price growth of 14.95%
Regional median home prices in Queensland, South Australia and New South Wales were up 11.35%, 9.28% and 3.87%, respectively, for the year to August.
The Sydney home at 16 Rutland Street, Blacktown traded hands for $1.08 million last month. Picture: realestate.com.au/sold
In the regional markets of Victoria and the Northern Territory, median home prices declined 1.74% and 1.58%, respectively, during the 12 months to August.
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