CoreLogic's home value index rose 0.8% in September, marking the eighth consecutive month of growth.

Property prices across the nation rose 2.2% over the September quarter, with gains particularly strong in Adelaide (up 4.3%), Brisbane (up 3.9%), and Perth (up 3.6%).

Property prices bottomed out in January after experiencing the steepest peak to trough decline on record on the back of an all-time high reached in April 2022.

The home value index has since increased 6.6% to sit just 1.3% below its previous peak.

According to CoreLogic research director Tim Lawless, the Australian property market is on track to reach another record nominal high before the end of the year.

"We have already seen dwelling values reach new record highs in Perth and Adelaide," Mr Lawless said.

"Brisbane looks set to reach a new record high in October, with home values currently only 0.6% below their previous peak.

"Hobart and Canberra have the furthest to go before staging a nominal recovery, with dwelling values remaining 12.4% and 7.0% below their cyclical highs from last year."

While low levels of supply continues to be the primary driver for growth, the start of spring selling season has seen more properties hitting the market.

The increase in listings likely led quarterly house price growth to ease from 3% June.

Mr Lawless said the premium sector has been driving demand in recent times, but the dynamic appears to be shifting.

Many of the nation's more expensive properties saw price growth ease in September while properties on the cheaper side saw values accelerate.

"This shift is partly attributable to the lower value capitals such as Perth and Adelaide recording a faster rate of growth, however even in these cities it is the lower quartile that has outperformed,” Mr Lawless said. 

"Possibly we are starting to see renewed affordability challenges deflecting more demand towards the middle of the market where barriers to entry are lower.”

*Property prices in Hobart, regional Tasmania, and regional Victoria are still declining.

Demand in capital cities intensifies

According to PropTrack's home value index for September, also released over the weekend, property prices across Australia's capital cities are now at record highs, having recovered entirely from the falls of 2022.

Growing supply levels continue to be outstripped by demand, particularly in the nation's largest cities due to a greater amount of migration.

Melbourne and Sydney have both seen more properties hit the market in recent months but strong demand continues to push up prices.

Property in Sydney is now just 0.03% cheaper than it was at its peak in February 2022, according to PropTrack, while Melbourne property values have recorded positive annual growth for the first time since 2022.

PropTrack also confirmed that in nominal terms (not adjusted for inflation), September saw record high property prices in Brisbane, Adelaide, and Perth.

Moving forward, PropTrack senior economist Eleanor Creagh expects the key drivers of demand to keep pushing up prices.

"Looking ahead, interest rates have likely peaked and population growth is rebounding strongly," Ms Creagh said.

"Together with a shortage of new home builds, prices are expected to rise.

"As we head further into spring, more markets are likely to reclaim 2022’s fast falls to set new peaks."

Regional Australia experiencing softer growth

While the capital city property markets are strong, growth was decidedly softer in regional Australia.

Dwelling values in the regions rose 1.1% over the September quarter according to CoreLogic – less than half of the 2.5% increase recorded across the combined capital cities.

Mr Lawless said the gap is a byproduct of demand being so concentrated around our largest cities.

"The estimated number of home sales [across the combined regional markets] was 6.5% lower than a year ago and 9.2% lower relative to the previous five year average," he said.

"In contrast, the estimated volume of home sales across the combined capital cities was 1.9% higher than a year ago and 6.3% above the five-year average."

Image by Maximillian Conacher on Unsplash


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