Despite the Reserve Bank recently raised the cash rate, Australian housing prices have consistently risen, as demonstrated by a 0.33% increase in May, the fifth consecutive month of growth. This trend is largely due to easing supply constraints and fewer new listings, reducing competition among sellers. This leads to robust housing demand relative to available stock. Despite predictions of rising interest rates and a slowing economy, housing prices increased in all capital cities except Darwin in May, with Canberra and Perth leading the way.
Sydney and Melbourne’s housing markets have demonstrated remarkable growth, with Sydney prices growing for six months straight, showing a 0.58% increase in May. Similarly, Melbourne’s housing prices rose by 0.22% in May, its highest monthly growth rate since February of the previous year. Factors like rental supply shortages, increased migration, and the anticipation of easing interest rates have contributed to this resilience.
Brisbane and Adelaide’s housing markets have also shown steady growth despite potential affordability issues due to increasing interest rates. In contrast, Perth’s market has remained strong, thanks to relative affordability and limited supply, with a year-to-date increase of 3.07%. Meanwhile, Hobart’s market shows early signs of recovery after a period of price declines.
In May, Canberra’s housing market experienced substantial growth, with prices rising by 0.65%, marking three consecutive months of growth. Conversely, Darwin’s market saw a minor decline but remains stable overall.
Industry experts report a surge in buyer interest in the housing market due to a variety of reasons, such as a desire to downsize or confidence in stable employment. Low property supply is driving high clearance rates, stabilizing prices, and prompting active buyer engagement despite caution surrounding potential interest rate increases. As market conditions improve and stock levels normalize, experts predict an unusually active spring selling season.
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