Australian home prices set new records as market growth continues

Australian home prices have reached new heights, with both houses and units experiencing continued growth during the March quarter of 2024, as stated in Domain’s latest House Price Report. This marks the fifth consecutive quarter of growth for houses and the fourth for units.

Despite a slowdown in growth rates compared to previous quarters, experts predict that prices will continue to climb. Factors such as a chronic shortage of new homes, strong population growth, high construction costs, and a tight rental market are driving this upward trend. “The pace of price growth has slowed due to an increased supply of homes for sale, but significant demand persists, particularly in cities like Sydney and Melbourne,” Dr. Nicola Powell, Domain’s Chief of Research and Economics, explained.

The report highlights record-breaking prices across major cities. Sydney houses have now topped $1.6 million for the first time, while Perth’s unit prices have surged to new highs, surpassing levels last seen over a decade ago. “These figures reflect a robust demand for residential property, despite challenges like high-interest rates and cost-of-living pressures,” Dr. Powell added.

In Brisbane, Adelaide, and Perth, both houses and units reached new price records during the quarter. Adelaide’s house prices soared to over $900,000, illustrating the intense market dynamics in smaller capital cities.

Dr. Powell noted that challenging rental conditions might prompt more first-time buyers to enter the market sooner, especially at the more affordable end. This trend is expected to continue, affecting both houses and units across various markets.