RBA governor Michele Bullock’s announcement of a rates hold in July had a big impact on the market.
Australian property prices have climbed again to another record high over the past month as buyers capitalising on interest rate cuts slug it out over a dwindling pool of fresh real estate listings.
PropTrack figures released today revealed national values rose 0.3 per cent over July and are now about 5 per cent higher than they were at this time last year.
Adelaide recorded the strongest growth in the country. Perth, Brisbane and Hobart also recorded high growth, while rises in Sydney and Melbourne were more subdued.
Nationally it was the sixth successive monthly rise in prices but the smallest gain since the RBA announced the first of two interest rate cuts in February.
REA Group economist Anne Flaherty said the Reserve Bank decision to keep interest rates on hold at its last monetary meeting in early July may have moderated the pace of price growth in some markets.
“It may have encouraged more caution among some buyers,” she said.
PropTrack noted that the slower, steadier growth over July was also the result of a brutal tug of war emerging across key markets.
Low listing levels and falling interest rates heated competition for property on one hand, but this was moderated by crushing affordability constraints and economic uncertainty.
Competition at auctions has been strong in many areas because there is little stock. Picture: Sam Ruttyn
The result has been a mixed market, exhibiting characteristics of boom conditions in some city suburbs but a slowdown in others.
Agents revealed demand in the bigger capitals has also been more listing-specific than usual.
Buyers normally gravitate more toward the best quality stock but this trend has been even more pronounced than usual.
Part of the reason is that much of the activity pushing prices up appears to be coming from upsizers, who can often be more selective with their property choices.
Investors and first-home buyers, who often snap up the more dated homes or those with some drawbacks like a location on a busier road, have been less active.
A lower volume of winter listings, coupled with more buyers in the market, has pushed up prices. Picture: Sam Ruttyn
The result is a situation where older housing or properties with major drawbacks are lingering on the market, while the top listings in “blue chip” suburbs are attracting extreme levels of demand.
Smaller capitals like Adelaide and Perth have even been an exception, attracting high levels of interstate investment activity largely because of the lower prices and prospect more capital growth.
“Adelaide growth has been more surprising because it has outperformed the rest of the country for so long,” Ms Flaherty said.
“Investors are having a huge effect there. That’s part of what’s driving up prices and putting Adelaide ahead of the rest of the country for home price rises.”
REA Group economist Anne Flaherty said dramatic equity gains, especially in Brisbane and Adelaide, were encouraging big spending in the upgrader market.
PropTrack revealed that capital city growth exceeded rises in regional real estate markets over recent months.
This was a trend that had been fairly entrenched since the prior interest rate hikes of 2022 of 2023, which had sent buyers searching for cheaper markets offering better value.
Ms Flaherty said another reason cities like Adelaide and Brisbane were outperforming was because of the extreme price rises they had recorded over the last five years.
She pointed out that Brisbane prices were an average of close to double what they were in 2020, with Adelaide seeing a similar but smaller rise.
“There are many homeowners who now have a lot of equity they can use to upgrade to their next house and all that extra spending pushes up prices even more.”
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