Australian home prices hit a new record in May; Perth prices jump 20% in a single year while Brisbane and Adelaide also record gains
Key findings:
- National home prices lifted 0.30% to hit a new record in May, bringing prices up 2.73% year-to-date. Prices were 6.68% above May 2023 levels and up 9.58% from their December 2022 low.
- Prices in the combined capital cities rose 0.41% to a new peak in May. Capital city prices are now up 7.22% year on-year, though performance has diverged between capitals as well as regional areas.
- All capitals bar Hobart (-0.13%) and Canberra (-0.21%) saw prices rise in May, though the pace of home price growth has slowed since the end of the summer in every capital city.
- Perth (+0.73%), Brisbane (+0.67%) and Adelaide (+0.53%) recorded the strongest price growth in May. In keeping with the trend seen for much of the past two years, these markets remain the strongest for annual growth, with Perth prices up 20.58% over the past year, while Adelaide and Brisbane have grown 14.49% and 13.69% respectively.
- Prices in capital cities have outpaced regional areas over the past year. This trend continued in May, with prices in the combined regional areas remaining flat while regional NSW (+0.16%) and regional Tasmania (+0.12%) were the only regional markets to see price growth in May.
“With housing supply unable to meet demand, national home prices have cycled through 17 consecutive months of growth to hit a fresh peak in May.
“Despite a rise in the number of homes for sale this year, strong population growth, tight rental markets, and home equity gains continue to bolster strong demand. Meanwhile, building activity remains challenged by capacity constraints and higher costs, with consequent tight housing supply pushing prices and rents higher.
“This mismatch between supply and demand is continuing to offset the higher interest rate environment. Further, current interest rate stability has sustained buyer and seller confidence, while ongoing home price rises are likely incentivising many to overcome affordability challenges and transact with the expectation of further growth.
“Despite some easing in the rate of population growth and more stock on market, home prices are expected to lift further in the months ahead. Although, it is likely the pace of growth will continue slowing through the seasonally quieter winter period, particularly with interest rate cut expectations pushed out to late-2025.”
Sydney
Sydney home prices lifted 0.42% in May to a new peak, bringing prices up 3.09% year-to-date. Prices were 7.01% above May 2023 levels and 11.89% abover their November 2022 low. The uplift in properties hitting the market this year has been matched by robust demand fuelling further price increases. However, growth momentum has slowed consistently since February as buyers benefit from more choice.
Brisbane
Brisbane is now the second-most expensive capital following a period of consistently strong growth. Prices are now 18.15% above their December 2022 low, putting values ahead of Melbourne and on par with Canberra. Brisbane remains one of the strongest performing markets over the past year with home prices now 13.69% above May 2023 levels. Prices lifted a further 0.67% in May to a fresh peak, though the strength of monthly growth has eased from the fast pace seen throughout the first three months of 2024.
Perth
Perth has maintained its streak of relative outperformance and remains the strongest market in the country for monthly (+0.73%) and annual (+20.58%) home price growth. Tight supply amid strong buyer demand has seen competitive conditions fuelling strong price growth. The relative affordability of the city’s homes, population growth, and very tight rental markets are also supporting home values.
Darwin
Darwin home prices rose 0.25% in May, with prices now 1.38% higher than a year ago. However, prices remain 1.34% below their May 2022 peak.
Melbourne
Melbourne home prices lifted 0.23% in May, reversing the small falls (-0.05%) seen in April. Prices are up 0.87% year-on-year but remain 3.08% below their March 2022 peak. Melbourne’s recovery is lagging Sydney and Brisbane, where prices fully recovered from 2022’s falls last year. Prices in Melbourne have regained just under half of their decline, up 2.42% from their January 2023 low.
Adelaide
Adelaide home prices rose 0.53% in May to a new peak. Adelaide remains one of the country’s top performing markets, with home prices up 14.49% year-on-year. The comparative affordability of the city’s homes has seen prices defy the significant increase in interest rates since May 2022. Low stock levels are also intensifying competition, with home prices in Adelaide rising at a fast pace over the past year.
Hobart
Prices in Hobart fell in May, declining 0.13% to sit 1.93% below levels seen this time last year. Hobart remains the weakest capital city market when comparing annual price growth (-1.93%), as well as the change from peak (-8.97%). However, this comes following a period of outperformance during the pandemic as well as strong growth in the years preceding. Home prices in Hobart are still up 34.9% since March 2020.
ACT
Home prices in Canberra fell 0.21% in May, though prices remain 1.23% above May 2023 levels. After recovering just under a third of their decline, prices were 4.58% below their March 2022 peak.
*** Article written by Eleanor Creagh, Senior Economist, Proptrack
