National home prices increased for the ninth consecutive month in September, climbing to a peak 0.35% month-on-month and 4.31% in the year to date, fully reversing the most rapid decline in home prices in recent history, according to PropTrack.
Eleanor Creagh (pictured above), PropTrack senior economist, said it is capital city home prices that have taken the lead in 2023 after falling for much of 2022, with prices in the capitals up 5.41% so far this year.
Leading the housing market recovery is Sydney, after it led the downturn last year. House prices in the harbour city lifted 7.93%, while units rose 5.24% in year to date. All greater Sydney regions have so far recorded increases in both house and unit prices. In fact, of the 10 regions that had posted the greatest increase in house prices this year, four are in Sydney.
Perth saw the biggest increase in house prices of all the capitals this year, with prices up 8.39%. Particularly strong growth was registered in Perth’s South East region, where house prices rose 10.27% year to date.
“Perth and Adelaide bucked the falling trend altogether in 2022,” Creagh said. “Stronger growth has continued in both these capitals this year and they’re the strongest performing capital city markets comparing annual price growth. Prices have risen 9.24% in Perth and 8.31% in Adelaide since September 2022 as buyers compete for limited options and affordability is less constrained.”
Sydney might have led the turnaround, but it was Brisbane that was first to recover all of 2022’s price falls and return to peak. Here, unit prices grew 6.66% in the year to date, compared to a 6.43% lift in house prices.
In Brisbane, some areas saw a particularly strong uptick in prices this year, with houses in Brisbane’s South region and units in Logan – Beaudesert experiencing strong growth so far this year.
Another standout performer was Regional Queensland, particularly for apartments, which rose 5.94% so far this year, outperforming house price growth of 4.57%.
“Unit price growth in both Brisbane and Regional Queensland is not only outperforming house price growth in Brisbane and Regional Queensland, but also outperforming unit price growth in all other capital cities and rest of state areas,” Creagh said. “Six out the top 10 regions where unit prices have recorded the largest lift year to date are in Queensland.”
The PropTrack economist said there were several reasons why these regions saw stronger price growth.
“In Sydney, a strong rebound in population growth with higher numbers of net overseas arrivals is likely to have bolstered demand for housing,” Creagh said. “Meanwhile, Perth, Adelaide, and South East Queensland regions have likely been buoyed by their relative affordability, population growth and interstate migration. Queensland and WA continue to attract the most interstate migrants, likely contributing to increased demand for housing.”
Looking ahead, PropTrack is expecting house prices to increase, with more markets reclaiming peak levels after recovering last year’s losses, as population growth strongly recovers and given the shortage of new homes.
“Home prices in 2024 will also be influenced by whether interest rates begin to move lower,” Creagh said. “Many expect interest rates will be cut at some point in 2024, causing borrowing capacities to increase and mortgage servicing costs to decrease, likely fuelling a continued rise in prices.”
Read the full PropTrack Home Price Index - September 2023 report.
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