Interest rate hikes and global economic turmoil have yet to fully stall growth in Australia’s housing market, with property prices continuing to climb over recent weeks in many areas.
New valuations data from PropTrack has revealed house prices continued to grow in 70 per cent of Australian suburbs over the past three months.
Unit values grew in about 71 per cent of the suburbs with available data, with cheaper regional suburbs and outer capital city markets experiencing some of the most significant gains.
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Median home value falls were more common at the higher end of the market, with apartment prices falling in many of Sydney’s inner ring markets.
There were also falls in many premium Brisbane and Melbourne suburbs.
Widespread gains occurred even as uncertainty rippled financial markets and households braced for higher borrowing costs, with the RBA widely tipped to announce another cash rate hike in May.
Ray White chief economist Nerida Conisbee said there was a definite “mood of caution” among buyers right now, but this was being offset by underlying housing supply shortages.
“Much of the weakness is in the pricey parts of Sydney, and to less of an extent, Melbourne, which was in a fragile recovery,” she said. “Other markets have been more (resilient).”
She said prices were still rising in many areas, albeit at a slower pace than last year, because of strong demand at the bottom of the market.
Part of this was the result of buyers hunting for bargains in times of uncertainty.
An air of caution has descended on auctions, but prices continue to rise in most areas. Picture: Jeremy Piper
Government support has also been a factor. First-home buyers, supported by schemes like the First Home Guarantee, are piling into suburbs where prices remain within reach.
“Data from the ground shows attendance at open for inspections has been falling, but structural issues in housing supply remain and we can expect construction costs to re-accelerate.
“Some markets such as Perth and Adelaide have a shortage of homes … we can expect markets to weaken further but there is unlikely to be a major fall in prices. There is not enough stock.”
Ray White Group chief economist Nerida Conisbee said buyers were becoming more cautious but major price falls were unlikely. Picture: Supplied
It was a different story at the prestige end of the market, Ms Conisbee noted. Unlike first-home buyers, high-end purchasers tended to be more selective – and more willing to wait.
That hesitation is affecting premium property prices, with some high-end markets recording declines as discretionary buyers hit pause.
Adding to the caution is the rise in mortgage costs, which is forcing even wealthier Australians to think twice before taking on massive new loans.
The result is a two-speed housing market: resilient at the bottom, but increasingly fragile at the top, with major variations across states.
Many economists expect RBA governor Michele Bullock to announce another cash rate hike in May. Picture: Martin Ollman
In Queensland, up to $325,000 in equity has vanished from some of the state’s most exclusive suburbs in just 12 weeks. There were also many areas where prices rose.
In South Australia, home prices continued their climb over the past quarter. House and unit values experienced double-digit growth in five areas.
NSW was a mixed bag. Parts of Sydney’s housing market defied the laws of gravity with continued home price rises, while others saw falls. There were 267 Sydney suburbs where house values continued to grow, accounting for about 40 per cent of Sydney areas. Unit values rose in another 227 suburbs.
Across Melbourne overall, typical house values rose in 378 suburbs and held steady or dipped slightly in 27 areas.
Perth remains the country’s strongest major capital city housing market for price growth.
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