National home prices held steady in December as the growth in regional areas made up for the drops seen in capital cities, a report by PropTrack found.
In its latest Home Price Index Report, PropTrack data revealed that national home prices grew by 5.52% in 2023. It also found that the combined capital city prices saw a decrease by 0.09% in December after peaking in November, which marked the first time home prices had declined in 2023.
“Several factors contributed to the slowdown in home prices over the last quarter of 2023,” said Anne Flaherty, an economist at PropTrack, in the report.
“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.”
Throughout December, Sydney saw prices fall by 0.08% with the median home price being $1,062,000. This was followed by Melbourne, Hobart, and Canberra decreasing by 0.55%, 0.41%, and 0.66% respectively. In contrast, Perth saw a 0.69% increase while Adelaide had a 0.59% increase, showing its continued strong growth. Brisbane and Darwin also saw an increase in prices with an uptick of 0.27% and 0.1%, respectively.
Meanwhile, regional areas saw a higher growth in price during the last month of the year, with the combined regional areas seeing a monthly growth amounting to 0.23%. Regional home prices rose by 3.2% over 2023, reaching a new peak in December with the median value being $625,000.
However, Flaherty noted that despite regional areas seeing higher growth in December, combined capital city areas were still the clear outperformers in 2023. Prices were up by 6.44% over the course of the year, with a median value amounting to $824,000.
Regional Queensland and South Australia were the key drivers of growth, with 0.51% and 0.5% increases over the month, respectively. This marked new peaks for the two areas in December, with their median home values sitting at $634,000 and $412,000, respectively.
Flaherty noted that the key contributor to the increase in prices in the markets of Perth and Brisbane was housing supply as it was still overall relatively constrained despite the rise in the number of properties listed for sale in the recent months.
“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,” Flaherty said.
