National median property price now $772k

The CoreLogic Home Value Index (HVI) grew in March for the 14th straight month, with the national median property price now at $772,730.

This is up $71,832 from January 2023, a 10.2% increase, and since November last year each month has seen a new record nominal high for property prices.

Every capital city except Darwin and all 'rest of state' areas except Regional Victoria saw property prices increase through March.

The current big three performers continue to lead the charge though, with the rate of monthly growth accelerating in both Perth (up 1.9% through March) and Adelaide (up 1.4%) while Brisbane grew another 1.1%.

In Q1 2024, the national median price rose 1.6%, above the 1.4% recorded in Q4 '23 but well behind the highs of mid last year when home values were hitting 3.3% quarterly growth.

Tim Lawless, CoreLogic's Research Director said prices are still rising in spite of the "headwinds" of rate hikes and the elevated cost of living.

"An undersupply of housing relative to demand continues to keep upwards pressure on home values despite these headwinds," he said.

"Housing remains in short supply and purchasing demand is still high due to interstate and overseas migration."

Affordable housing further out of reach?

The extent that property price growth has outstripped wages growth in recent decades is a source of concern for many, particularly younger Aussies, that home ownership is growing ever more unaffordable.

CoreLogic research has found wages grew 81.7% over the 20 years to 2022, while property prices rose 193.1% over the same period.

Over the year to September '23, wages were growing faster than property as sharp price drops coincided with a tight labour market, but normal service looks to have resumed.

According to CoreLogic, Australian property became 6.2% more expensive throughout 2023, considerably ahead of both wages growth (4.2% through the year to December per the ABS) and annual inflation (4.1% in Q4).

Mr Lawless said the imbalance between supply and demand, in particular the "insufficient" amount of new homes being built, means the cost of Australian property is likely to continue to climb.

"The residential construction sector continues to run up against shortages in labour, high material costs and depressed profit margins," he said.

"We should see the rate of population growth easing, however without a catch up in supply, Australian housing markets are likely to be navigating an undersupply for a few years yet."

At the same time, the RBA is projecting unemployment to gradually rise throughout the year, to 4.2% by June and 4.3% by the end of the year.

RBA modelling based on the Phillips Curve, which implies an inverse relationship between the unemployment rate and wage growth, suggests this will mean Aussies can expect more modest pay increases than last year.

CoreLogic says this could mean demand "deflects" to property at the lower end of the price scale - suburbs on the outer fringes of the capitals for example, as well as the multi unit sector.

Where growth is strongest

While growth is consistent across the majority of Australia, the extent remains highly diverse.

Melbourne for example saw prices remain virtually unchanged through the month, and quarterly growth still negative, a far cry from the performances of Perth, Brisbane and Adelaide.

Even within these hotter markets, there are still some areas significantly outperforming others: these are the ten SA3 regions with the biggest annual growth to the median dwelling price since March '22.

All but Logan and Mt Gravatt (both Brisbane) are in Perth, which further illustrates the boom that the WA capital is in the midst of.

Picture by Pat Whelen on Unsplash

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