Housing Market Bounces Back with the Strongest Price Gain…
So, house prices in the capital cities have gone up like crazy over the last quarter! As per the recent house price report from DOMAIN it’s four times faster than the previous quarter, to be precise. And it’s the biggest gain since late 2021. The good news is that we’ve now recovered half of what we lost during the 2022 downturn. Basically, everything’s looking up!
All the capital cities had a rise in house prices, and are now well into the recovery phase. Except for Canberra, which is still in a bit of a price trough. As for units, they had a bit of a rough time lately, with five consecutive quarters of decline. But, over the recent quarter, they actually went up for the first time since 2021 and had the most significant gain in two years!
In terms of unit prices across the combined capitals, it’s been a bit of a rollercoaster. Prices declined in recent years and reached their lowest point in March 2023. But now they’re creeping back up, having recouped about half of the losses. Sydney’s the real winner here, leading the charge on the recovery. It’s almost two-thirds of the way back to pre-2022 levels.
Why is this happening? Well, it seems to be a case of supply and demand. There are way fewer homes for sale than usual, leading to a surge in buyer interest. However, that balance is tipping as more and more homes hit the market to take advantage of rising prices. This could mean things start to slow down a bit soon, especially with the recent pause on interest rate hikes.
Speaking of rates, they’ve been an issue for some people trying to get into the market. It’s tough to get approved for a loan when the requirements are so strict. But things are looking positive now that the cash rate is holding steady and likely near its peak. This should boost confidence for buyers and sellers alike.
Also the flow of new listings is improving, and that should ease some of the strain. Homeowners are more likely to sell if prices are high, or if higher debt costs are looming. Some cities are already seeing more homes hit the market, and confidence in the housing market is improving.
As we move into the second half of the year, it will be interesting to see how everything pans out. If listings continue to rise, and more homes come onto the market, there could be a slowdown in the price growth we’ve been seeing lately. But hey, for now, let’s enjoy the fact that things are starting to look up!
For more insights, here is the report by Domain.