Data from Domain shows Australia’s housing market has now fully recovered from a 2022 downturn that mainly affected the Sydney and Melbourne markets.
December 2023 combined capital city prices have surpassed previous records set in March 2022 for houses and December 2021 for units.
For houses, the combined capital city median price was nearly $1.095 million, while for units it's more than $638,000.
The numbers represent a steady recovery in house prices on a nation-wide basis and a relatively rapid one for units.
House prices nationally fell for three consecutive quarters and took a full year to recoup, while unit prices fell for five consecutive quarters and recovered in three quarters of growth.
Around the cities
Houses in Sydney, Brisbane, Adelaide, and Perth are at record high prices as are units in Brisbane, Adelaide, and Canberra.
An established recovery is now well underway for Sydney and Melbourne unit prices with analysts expecting Sydney units to set a new record in the first quarter of 2024.
Perth, Brisbane, and Adelaide recorded the greatest house price gains over the December quarter, with only Canberra and Darwin recording falls.
For units, the strongest gains were in Hobart, Brisbane, Perth, and Adelaide, with only Darwin recording a decline.
It’s expected the Melbourne market will experience a full market recovery during 2024.
However, the data shows a weakening in smaller capital cities: Canberra, Hobart, and Darwin.
Hobart is more than $57,000 off the peak, while Canberra is $151,000.
Lower housing supply nationally
The total number of properties for sale across Australia remains lower than the previous year and the five-year average.
Only Melbourne, Canberra, and Hobart have overall supply above the five-year average.
Lower supply generally results in rapidly growing housing prices, however, analysts said growth is being contained due to cost-of-living pressures and lack of mortgage affordability.
Promised stage-three tax cuts and reports of new federal government cost-of-living relief measures may boost housing affordability in 2024, according to analysts, particularly if interest rates also fall.
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