Australian House Prices Smash Records, Fully Reversing 2022 Lows

Australian House Prices Smash Records, Fully Reversing 2022 Lows
A general view of homes in the suburb of Balmain is seen in Sydney, Australia, on Sept. 7, 2022. (Lisa Maree Williams/Getty Images)

Home buyers and sellers have expressed confidence in Australia's housing market, leading to the full reversal of the most rapid decline in house prices in recent history.

National prices recovered to reach peak levels from 2022 lows after climbing 0.38 percent in September and by 4.31 percent this year, according to PropTrack's Home Price Index report released on Sunday.

Buyer and seller confidence is on the rise with a significant increase in choice in the major capitals, PropTrack senior economist Eleanor Creagh said.

"Home price growth has been driven by record levels of net overseas migration, tight rental markets, and a housing shortage," she said.

"While a sharp increase in the number of properties hitting the market in Sydney and Melbourne has been improving choice for buyers, strong demand has seen prices continue to lift."

Sydney led the country in September after prices grew by 0.48 pecent last month and by 6.86 percent since the start of the year.

The city's median house value is now worth more than $1 million with demand remaining red-hot in the areas around the CBD and north of the harbour bridge.

Melbourne house prices ticked up by a quarter of a percent in September and have returned to positive annual growth for the first time since 2022.

The momentum in Brisbane's market has continued for the ninth consecutive month, growing by 0.39 percent in September to reach a new record.

Choice remains limited in Brisbane leading to strong competition and solid selling conditions, which is pushing prices to fresh peaks, the report stated.

Relatively affordable prices and limited stock leading to intense competition in Adelaide have defied rapid interest rate hikes.

The city's market grew by almost half a percent last month and has grown by more than eight percent to make it one of the country's top-performing markets.

Perth led the gains in house prices in September, rising by 0.71 percent but remains one of the cheapest cities to buy after Darwin.

Darwin was the only major capital city to see a decline in house prices, dropping 0.01 percent in September and 1.64 percent this year with the report attributing this to the fact that the city didn't experience a large downturn compared to other cities.

With interest rates likely to have peaked and the continued population growth mixing with a shortage of new homes, Ms. Creagh expects prices to continue to rise.

"As we head further into spring, more markets are likely to reclaim 2022's fast falls to set new peaks."