Australia’s housing market recovery is gaining momentum, with capital cities recording their fastest price gains since late 2021.
Domain’s latest House Price Report found combined capital city house prices recouped almost half of the value lost in the 2022 downturn over the June quarter.
House prices increased $35,000 (or 3.4 per cent), clawing back a large chunk of the $60,000 (or -5.6 per cent) lost during the housing downturn.
Also read: NAB’s major property price prediction
All capital cities saw house prices rise over the quarter, except Canberra, with Adelaide and Perth reaching record-high prices.
Sydney continues to lead the recovery and recorded the greatest acceleration in growth, recouping $97,000 of the $151,000 lost during the downturn.
Combined capital city unit prices also increased, lifting for the first time since late 2021 and posting the most substantial quarterly gain in two years. Since reaching a trough in March 2023, unit prices have clawed back $16,000 of the $34,000 lost - or roughly half.
Sydney, Melbourne, Brisbane and Adelaide unit prices all rose over the quarter, Darwin held steady, while Canberra, Perth and Hobart saw a decline.
‘Mismatch between supply and demand’
Domain’s chief of research and economics, Dr Nicola Powell, said the continued mismatch between supply and demand had been fundamental to the price recovery.
“This has been fuelled by an unseasonably weak flow of new listings and rising demand - with the total number of homes for sale 22 per cent below the five-year average for the combined capitals,” Powell said.
“However, the tide is gradually changing, as the flow of new listings improves, likely spurred by the persistent pricing recovery, or home owners selling due to the higher debt costs.
“While new listings remain lower than average, there is noted improvement from the deeper declines we have seen previously.”
With housing confidence improving and the mortgage cliff unravelling, Powell said we could begin to see a slowdown in price growth as listings continued to rise.
Top 10 suburbs
Five of the top 10 suburbs for annual price growth were located in South Australia, with Glenelg North units experiencing the biggest gain of 52.9 per cent to a median value of $535,000.
Four of the remaining suburbs were in Queensland and one was in north-west Western Australia.