Property prices could potentially reach a new peak by January if they continue to rise at the same pace as over the previous quarter, according to the latest insights from PropTrack.
The PropTrack Market Insight Report found that national prices could bounce back to positive annual growth in July and reach a new peak early next year if they maintain their upward trajectory.
The housing market has so far avoided the steep falls many expected. Following a 4% decline in property prices from their March 2022 peak to their December low, national home prices have climbed 1.55% and are now just 2.6% below their peak.
In Sydney, prices have quickly rebounded, already up 3% from their November low, and could return to positive annual growth by the end of June and surpass their prior peak by December if prices continue to grow at the same pace.
Both Canberra and Brisbane have also experienced a rapid turnaround in prices. If growth continues at its current pace, home prices in Brisbane could be on track to swing back to positive annual growth by July and surpass their April 2022 peak by September, while Canberra could return to positive annual growth in October and set a new record by November 2024.
Adelaide and Perth bucked the trend of falling prices seen for much of last year. The pair saw home prices climb to fresh peaks in May, with Adelaide up 2.6% and Perth up 3.1% so far this year. If growth is maintained, both cities will continue to hit new price peaks throughout 2023.
Eleanor Creagh (pictured above), PropTrack senior economist, said stronger market conditions are becoming more widespread this year, after five months of price growth.
“Housing demand is stronger, likely bolstered by the surge in net overseas migration, as well as very tight rental markets,” Creagh said. “Given limited new stock is coming to market, buyer interest is being concentrated, which is underpinning home prices and offsetting the downward pressure from interest rate rises.”
There are factors, however, that may drag on the pace of future price increases.
“Price growth may wane if stronger market conditions improve seller confidence and spark a boost in stock coming to market,” Creagh said. “Interest rates also rose again in June and may rise further, which could slow the recovery. Though, interest rates are closer to their peak than not, and the shock of rate rises has lessened.”
PropTrack is also expecting population growth, tight rental market conditions, and a housing shortfall to continue.
“If stronger demand holds up against the expected slowing of the economy, most capital city markets would return to positive annual price growth in the coming months,” Creagh said.
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