National home prices have risen for the sixth consecutive month following a decline in the latter half of 2022. However, in some regions, prices have not wavered in the past year, growing by as much as a tenth in value.
According to PropTrack's June Home Price Index, prices rose by 0.31%. This brings the cumulative increase to 2.3% year-to-date.
Although national prices are still slightly below peak and June 2022 levels, they are recovering despite the sharp rise in interest rates, and a few factors seem to be supporting their upturn.
The first is fewer new properties being listed on the market. The number remains below what was seen a year or two years prior meaning that options are quite limited for prospective buyers.
The second is that demand, measured by the number of potential buyers per listing, remains 1.8 times higher than pre-pandemic levels. This is likely due to strong fundamentals for housing demand: unemployment is extremely low, wages are growing, and migration is supporting population growth.
These trends are being seen in most areas across the country but in some regions prices have grown at a much higher rate.
In fact, regional Queensland, South Australia and Western Australia largely avoided the downturn in 2022 and have continued to show strength in the market, with prices in multiple regions continuing to hit new peaks.
This is evident when we look at the regions where home prices have grown most in the past year.
|SA4 region||State||Annual growth in house prices|
|Barossa - Yorke - Mid North||SA||10.0%|
|South Australia - South East||SA||8.8%|
|South Australia - Outback||SA||8.8%|
|Perth - South West||WA||8.2%|
|Adelaide - North||SA||7.9%|
|Darling Downs - Maranoa||QLD||7.3%|
|Perth - North East||WA||7.1%|
Bunbury in regional WA and Barossa - Yorke - Mid North in regional SA saw their house prices rise by 10% since June 2022, the highest among all regions.
Houses in South Australia's South East and Outback also experienced strong growth with prices 8.8% higher than a year prior.
For units, Adelaide - North and Cairns regions were the top performers with prices increasing by 10.5% and 10.4% over the past 12 months.
|SA4 region||State||Annual growth in unit prices|
|Adelaide - North||SA||10.5%|
|Adelaide - South||SA||9.5%|
|Logan - Beaudesert||QLD||9.4%|
|Adelaide - West||SA||9.3%|
|Brisbane - East||QLD||5.9%|
Unit prices in Toowoomba and Logan - Beaudesert in Queensland increased substantially as well. They are now respectively 9.6% and 9.4% higher than June 2022.
These regions in particular have seen exceptional price growth for a number of potential reasons - their relative affordability and heightened interstate migration.
Their median house and unit prices remain below the national average; in an environment of much higher interest rates, and strained affordability for many buyers, that relative affordability may be a drawcard for potential buyers.
According to the Australian Bureau of Statistics, WA and QLD also had the highest rate of population growth, driven in part by interstate migration, in the December 2022 quarter. This is likely contributing to increased demand for housing in the aforementioned regions.
Although markets are expecting a further two interest rate increases by early next year, prices are likely to continue increasing in the coming year if shortages in supply and strong demand persist.