Record high: Australian home prices jump as property market shakes off summer slowdown

Home price growth accelerated in February, with strong buyer demand soaking up the influx of new properties that hit the market over summer.

The property market has brushed off its summer slowdown, with values rising across most of the country in February and prices breaking records in four capitals.

The latest PropTrack Home Price Index showed the national median home value jumped 0.45% last month, while the combined capital city median climbed 0.48%.

Australia’s median home value is up 6.15% over the past year while capital city prices have grown a little faster, sitting 7.06% higher than this time last year.

PropTrack senior economist Eleanor Creagh said the slowdown in home price growth at the end of last year has reversed and prices have hit a new peak, despite rising listing volumes.

“More homes have hit the market this year, but demand has kept up with that increase,” she said.

Strong population growth, tight rental markets and the chance of interest rate cuts have bolstered demand, Ms Creagh said.

“The expectation that interest rates will fall in the second half of 2024 is likely providing a positive tailwind for activity,” she said.

Data released on Wednesday showed the annual rate of inflation remained steady at 3.4% in January. 

While this is still outside the Reserve Bank’s 2-3% target range, the flat result increases the likelihood that rates have peaked, with the next rate move likely to be a cut.

Brisbane is now as expensive as Melbourne

Of the capital cities, Adelaide recorded the strongest growth in February, followed by Perth and Sydney.

But in Brisbane, remarkable growth has pushed up the city’s median home value to equal that of Melbourne.

Brisbane’s median home value is now equal to Melbourne’s, according to the latest PropTrack Home Price Index. Picture: Getty


Brisbane home values grew 12.16% over the past year, compared with 1.33% growth in Melbourne. 

The stark difference in growth rates means Brisbane has now caught up, with both cities recording a median home value of $797,000 – tied for third place behind Sydney, Australia’s most expensive city, and second-priciest Canberra.

Further price rises are expected in 2024

Despite more homes being listed for sale and rising prices making property less affordable, markets are expected to keep steaming ahead in 2024. 

A slowdown in construction has hampered the supply of new housing, Ms Creagh said, concentrating demand for existing properties. 

Meanwhile, potential rate cuts could boost buyers’ borrowing capacities, giving them more money to spend.

“Looking ahead, the positive tailwinds for housing demand and a slowdown in the completion of new homes are likely to offset the impact of reduced affordability and a slowing economy, supporting prices,” Ms Creagh said.

“As a result, prices are expected to lift further in the months ahead.”

How home prices changed around the country in February

Sydney

A surge in properties for sale in Sydney hasn’t yet slowed demand, with prices rising 0.55% in February and 7.77% over the past year.

“Despite the increase in new listings hitting the market in Sydney, buyer demand kept up as the summer selling season drew to a close,” Ms Creagh said.

Sydney’s median home value is now $1.053 million. Broken down by property type, a typical house is valued at $1.34 million, compared to $793,000 for units.

Agents report strong interest in newly-constructed homes, like this Caringbah South duplex that sold for $2.39 million in February. Picture: realestate.com.au/sold


Unit values grew almost twice as fast as houses, rising 0.97% in February compared to a 0.43% lift for houses, which reflected a trend seen across the country.

“Housing affordability has deteriorated significantly as interest rates have risen and the apartment market offers a relative discount,” Ms Creagh said.

BresicWhitney director Shannan Whitney said Sydney’s market had become more balanced, but buyers were becoming increasingly active.

“There seems to be more eyeballs and more interest on the ground from buyers,” he said.

“Fully developed and well-executed turn-key lifestyle properties, which can be in all different price categories and geographies, the market is more confident with those.”

“Properties requiring capital, construction and council intervention for DAs, there’s more caution in that part of the market.”

Melbourne

Prices rose 0.28% in Melbourne, taking the city’s median 1.33% higher than a year ago. Even so, prices remain 3.87% below the peak recorded in March 2022.

“The price recovery in Melbourne is lagging Sydney and Brisbane but remains ahead of Hobart and Canberra,” Ms Creagh said.

Gary Peer director Phillip Kingston said it was only a matter of time before Melbourne caught up with the other capitals, with interest rate cuts the most likely catalyst for growth.

“Inflation is coming down, immigration is rising, unemployment is low, and we are chronically undersupplied for housing,” he said. “All of the key metrics are there for the market to increase.”

Melbourne had the strongest price growth for units of all the capitals, with unit prices rising 1.14% over February compared to just 0.14% for houses.


HPG Estate Agents director Pierre Hadchiti said confidence was returning to the market and more people were inspecting properties, with strong interest in modern, high quality homes.

“Brand new units and townhouses with good quality finishes are pulling in substantial money,” he said. “People are more than happy to spend that little bit extra.”

Brisbane

The median home value in Brisbane rose 0.54% in February, taking prices 12.16% higher than a year ago, Ms Creagh said.

“Brisbane has been one of the strongest-performing markets since the pandemic onset, with prices up 60.7% since March 2020 putting dwelling values on par with Melbourne,” she said.

While there has been a rise in the number of new listings in Brisbane, total properties for sale are down about 15%. This has made conditions more competitive for buyers, according to Belle Property head of Queensland Jon Iceton.

“There’s less available, so the houses coming to market in the first quarter and second quarter this year will be rolling in a premium,” he said.


Local upgraders taking advantage of rising property values and interstate migrants were driving price growth, Mr Iceton said.

“We’re seeing over a 40% lift in locals buying local,” he said. “A lot of people are shopping with a higher value of equity than before.”

Adelaide

Prices jumped 0.81% in Adelaide, making it the nation’s strongest performing capital in February.

Adelaide’s median value has increased more than 13% over the past year, driven by its affordability relative to the other capitals, Ms Creagh said.

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“Low stock levels are also intensifying competition, with home prices in Adelaide rising at a fast pace in 2024,” she said.

Price growth in northern Adelaide is among the fastest in the country, with the 16% jump in values in the city’s most affordable region only outpaced by parts of Perth.

Perth

Perth is yet to be dethroned as the capital with the fastest home price growth on an annual basis, with prices up 16.32% over the past year.

Ms Creagh said record-low supply amid strong buyer demand has resulted in a sellers’ market.

“The relative affordability of the city’s homes, population growth, and very tight rental markets are also supporting home values.”


Duet Properties founder Michelle Kerr said the lack of stock on the market in Perth amid high demand, especially from east coast investors, would continue pushing prices higher.

“We’ve got massive supply-side issues, whether it’s entry-level properties or the top end of the market,” she said.

“It’s difficult for people trying to buy their first home in WA because they’re competing with eastern states counterparts for the same product.”

Canberra

Prices in Canberra are up 1.16% over the past year after a 0.49% rise in February, but haven’t yet recovered since the rate-rise-induced downturn

“Despite recovering a small portion of their falls, prices remain 5.42% below their March 2022 peak,” Ms Creagh said.


Even so, Canberra is still the second priciest capital city for houses after Sydney, and equal second with Melbourne for apartments.

Hobart

Hobart was the only capital where property prices fell in February, with the median value dropping 0.12%.

Prices in Hobart are down 2.26% over the past year and almost 8% since prices peaked.


Hobart recorded strong price growth before and during the pandemic, and combined with high interest rates, this has caused affordability to deteriorate.

With prices stagnating and the number of properties for sale about 15% higher than a year ago, Hobart is a buyers market, in contrast to much of the country.

Darwin

Property prices in Darwin remained relatively flat, rising 0.08% in February.

Darwin’s median home value remains 2.38% below the peak recorded in May 2022.


With a median house price of $551,000 and a median unit value of $380,000, Darwin is Australia’s most affordable capital.