Yahoo Finance Property prices rise $2,587 in March
Not all capital cities saw gains though, with one still seeing major price falls.
Property prices have been falling since the Reserve Bank (RBA) started hiking interest rates in May last year but, for the first time since then, March bucked the trend.
CoreLogic’s national Home Value Index (HVI) posted the first price rise since April 2022, up 0.6 per cent in March.
Home prices were higher across the four largest capital cities, led by a 1.4 per cent gain in Sydney, with the median home price $7,470 higher than last month.
Also read: The suburb where 500 buyers are battling for a single property
Also read: $2,466 per sqm: Devastating reality of Aussie property market
Also read: Surprising Aussie city where property prices are up $211,000
CoreLogic research director Tim Lawless said property prices were likely rising due to fewer homes being on the market and very tight rental conditions.
“Although interest rates are high and there is an expectation the economy will slow through the year, it’s clear other factors are now placing upwards pressure on home prices,” Lawless said.
Lawless said property investors, or those who were more cashed up, were likely swooping in to buy properties since prices had been lower over the past 12 months.
“With rental markets this tight, it’s likely we are seeing some spillover from renting into purchasing, although, with mortgage rates so high, not everyone who wants to buy will be able to qualify for a loan,” Lawless said.
“Similarly, with net overseas migration at record levels and rising, there is a chance more permanent or long-term migrants who can afford to, will skip the rental phase and fast track a home purchase simply because they can’t find rental accommodation.”
Where are prices rising (and falling) the most?
Unsurprisingly, Sydney is leading the way, with properties in the most expensive suburbs enjoying the biggest gains.
“Sydney upper-quartile house values fell by 17.4 per cent from their peak in January 2022 to a recent low in January 2023 - the largest drop from the market peak of any capital city market segment. We may be seeing some opportunistic buyers coming back into the market where prices have fallen the most,” Lawless said.
The regions were also seeing prices rise again. Kangaroo Island in South Australia led gains, rising 2.6 per cent, followed by Dubbo (up 2.5 per cent) in New South Wales and Wellington (2.4 per cent) in Victoria.
“The best-performing regional markets are quite different to what we were seeing through the recent growth cycle,” Lawless said.
“In today’s market, it is mainly rural areas that are seeing the strongest increases, rather than the commutable coastal and lifestyle markets that were booming through the upswing. However, we are seeing some subtle growth return to regions within commuting distance of the major capitals, after many recorded a sharp drop in values.”
But property prices weren’t rising everywhere. Hobart recorded the largest drop among the capital cities, down 0.9 per cent over the month.
Housing values in Tasmania have fallen 12.9 per cent since peaking in May last year, overtaking Sydney as the largest cumulative fall from peak across the capital cities.
Follow Yahoo Finance on Facebook, LinkedIn, Instagram and Twitter, and subscribe to our free daily newsletter.
