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Key takeaways
National home prices held steady in December as growth in regional areas counteracted falls in the capital cities. Overall, prices rose by 5.52% in 2023.
After hitting a fresh peak in November, combined capital city prices fell 0.09% in December, marking the first time prices declined in 2023.
Across December, prices fell in Sydney (-0.08%), Melbourne (-0.55%), Hobart (-0.41%), and Canberra (-0.66%). Perth (+0.69%) and Adelaide (+0.59%) continued to record strong growth, with prices also up in Brisbane (+0.27%) and Darwin (+0.1%).
In contrast to the mixed movement across Australia’s capital cities, combined regional areas saw prices increase in December, resulting in monthly growth of 0.23%. Regional home prices reached a new peak in December, having risen by 3.2% over 2023.
Regional Queensland and South Australia were the key drivers of growth, up a respective 0.51% and 0.5% over the month to reach new peaks in December.
The latest Proptrack Home Price Index showed that nationally home values have grew 5.2% over the last year, but our markets were very fragmented with some states enjoying double digit growth.
Of course, even in the underperforming states, some locations outperformed considerably.
National home prices held steady in December as growth in regional areas counteracted falls in the capital cities.
Ms Eleanor Creagh, Senior Economist at PropTrack said:
Several factors contributed to the slowdown in home prices over the last quarter of 2023.
There was an additional interest rate rise as well as an increase in the supply of homes listed for sale, which provided buyers more choice and helped to alleviate competition.
Despite regional areas experiencing higher growth in December, combined capital city areas were the clear outperformers in 2023, with prices up 6.44% over the course of the year versus 3.2% in the rest of state markets.
Even though recent months have seen a rise in the number of properties listed for sale, overall supply remains relatively constrained, particularly in Perth and Brisbane.
This has been a key contributor to price rises in these markets.
Despite the cool down in capital city prices seen over December, prices in 2024 will be supported by population growth and what looks likely to be a more stable interest rate environment.”
State by State Property Market Update
The latest Proptrack House Price Index Report showed how fragmented our housing markets are.
Sydney
Sydney home prices fell 0.08% in December after reaching a record high in November.
This was the first time home prices have fallen in Sydney in 13 months, with values down across both house and unit markets.
Despite this, prices remain very close to peak levels and are sitting 7.72% higher compared to 12 months ago.
Melbourne
Melbourne saw its median home price fall by 0.55% in December, the second sharpest monthly fall behind Canberra. Home prices in Melbourne rose just 0.89% over 2023, remaining 4.6% below their peak levels reached in March 2022.
Melbourne has been the weakest performing property market in the nearly four years post-COVID, with prices sitting just 15.5% higher compared to March 2020.
Brisbane
Brisbane home prices rose 0.27% to reach a new peak in December, bringing total growth over 2023 to 10.45%.
High levels of population growth have supported demand for real estate in recent years, particularly post-COVID, making Brisbane one of the strongest performing capital city markets.
Brisbane’s median home price is now sitting an extraordinary 57% higher compared to March 2020.
Adelaide
Adelaide home prices reached a new peak in December, rising 0.59% over the month and bringing total growth over 2023 to 10.89%.
This places Adelaide as the second strongest performing market behind Perth in 2023.
Adelaide’s relative affordability has been a key contributor to its growth, providing it greater resilience against a backdrop of rising interest rates.
Perth
Perth was the strongest performing property market in 2023, recording the highest growth of any capital city or regional area.
Median home prices in Perth reached a new high in December, rising 0.69% over the month and 14.75% over the year.
Supporting home prices, buyers in Perth have faced relatively limited choice. As a result, those properties that are hitting the market are attracting high levels of buyer interest and properties are selling at close to record speeds.
Hobart
Home prices in Hobart have been trending downwards for close to two years, declining by a further 0.41% in December.
Hobart was the weakest performing capital city market in 2023, with prices down 3.5% over the year and 8.18% lower than their peak level reached in March 2022.
Lower trending prices in Hobart can, in part, be attributed to the abnormally high levels of growth seen during 2020 to 2021, driven by exceptionally strong buyer demand. Buyer demand has since normalised, and prices have corrected in response.
Darwin
Darwin home prices edged up 0.1% over December to reach a median value of $482,000.
Compared to 12 months ago, Darwin’s median home price is sitting 1.49% lower and remains 2.26% below its peak level reached in May 2022.
ACT
Canberra was the weakest performing market in December, with the median home price falling 0.66%.
Home prices in Canberra are up just 0.25% compared to 12 months ago and remain 5.86% lower than the peak levels reached in March 2022.
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