Home prices continue to defy the odds, rising for six months in a row
- PropTrack has revealed its Home Price Index rose 0.3% nationally in June 2023.
- Sydney led the charge, rising 0.6% followed by Adelaide (0.4%) and Perth (0.3%).
- A lack of supply combined with foreign demand are the main contributors to rising house prices.
- House price growth is expected to continue throughout 2023.
According to REA’s PropTrack Home Price Index for June, national prices are now just 0.1% lower than they were a year ago.
This follows growth of 0.1% and 0.3% in April and May respectively, hinting the 15-20% top to bottom fall in property prices many experts predicted this year may not materialise.
Across the capital cities, prices are up 0.41% in June to sit 0.06% higher than the same time last year.
Sydney continued to lead the way in house price gains, lifting 0.6%. Adelaide and Perth followed closely behind with +0.4% and +0.3% respectively.
PropTrack Economist Angus Moore said rate hikes aren’t hampering house prices as you would typically expect.
“Interest rates will continue to be a headwind for prices, but unlike in 2022, the peak of interest rates is likely close,” Mr Moore said.
“Higher interest rates are being offset by a limited flow of new properties hitting the market, as well as strong fundamentals for housing demand.
“With auction clearance rates strong, and fewer properties hitting the market during winter, price growth is likely to continue in the near term, despite the potential for further interest rate increases.”
Speaking to the Savings Tip Jar podcast, PropTrack Director of Economic Research Cameron Kusher echoed a similar sentiment.
“We've seen a big jump in the number of sales of properties, yet we haven't seen a jump in the number of listings coming to the market,” Mr Kusher said.
“So what we’re seeing is a very low volume of listings and more people buying. And the result of this is property prices have started rising.”
Regional areas have seen comparatively more subdued price growth throughout 2023, lifting 0.05% in June.
That said, prices in regional towns held up better in 2022, meaning there’s less catch-up involved in terms of regaining lost growth.
Property prices state-by-state breakdown for June
| Cities | Monthly growth | Annual growth | Median value |
| Sydney | 0.63% | 0.96% | $1,036,000 |
| Melbourne | 0.24% | -2.93% | $803,000 |
| Brisbane | 0.08% | 0.07% | $731,000 |
| Adelaide | 0.45% | 5.27% | $666,000 |
| Perth | 0.34% | 5.69% | $577,000 |
| Hobart | -0.36% | -6.37% | $668,000 |
| Darwin | -0.08% | -1.47% | $482,000 |
| ACT | 0.11% | -3.47% | $838,000 |
| Capital cities | 0.41% | 0.06% | $801,000 |
| Regional areas | 0.05% | -0.55% | $619,000 |
| National | 0.31% | -0.11% | $744,000 |
Source: PropTrack Home Price Index June 2023
Lack of supply driving property rebound
The lack of new properties hitting the market remains a key contributor to rising home prices.
ABS figures revealed total dwelling approvals fell to 11,594 in April, with private sector houses decreasing by 3.8% to 7,939 approvals.
Total approvals are now at the same level as in April 2012, when there were 3 million fewer people in the country.
And with an expected 400,000 migrants set to arrive this financial year, new dwelling supply is set to lag population growth, likely pushing house price growth even further.
AMP Chief Economist Shane Oliver said the worsening underlying demand/supply imbalance along with overseas migration is the main contributor to the rebound.
“This is accentuating very tight rental markets, forcing rents up and driving renters to consider buying earlier than they otherwise would have,” Mr Oliver said.
“At the same time foreign demand is returning. So buyer demand is strong but supply remains weak with listings remaining below normal.
“Talk of rising prices and shortages is in turn further boosting demand with an element of FOMO (fear of missing out).”
According to a recent PropTrack report, prospective buyers are most interested in Victorian and Melbourne suburbs.
Nine out of the 10 suburbs seeing the most engagement among those looking to buy a house were in Victoria.
For units, Victoria held six out of the 10 spots.
Will price growth continue?
Mr Kusher believes home prices will continue to rise this year, despite PropTrack initially forecasting a downfall of 7-10%.
“I think we'll continue to see pretty moderate price growth for the rest of this year,” he said.
“But of course, if more stock were to come onto the market through spring for example, people that are buying would have more negotiating power and might actually be able to negotiate a better price by playing properties off one another.
“And it's not out of the realm of possibilities that if there was a lot more stock for sale, we could start to see prices falling again.”
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