Australian home prices have surged to new heights in October, marking the 22nd consecutive month of growth despite ongoing affordability challenges.
National home prices increased by 0.26 per cent in October, with the combined capital cities now up 5.85 per cent over the past year.
Melbourne emerged as the strongest performer among capital cities, with prices jumping 0.49 per cent after six months of decline.
REA Group Senior Economist, Eleanor Creagh said price falls have started to reverse in Melbourne, with buyers out in force for the peak of spring selling season.
“Price momentum has been weaker in Melbourne over the past four years in part due to greater buyer choice and higher property taxes,” Ms Creagh said.
“Additionally, construction activity has aligned more closely with population growth over the past decade.”
She said the strength in Perth’s market has been particularly notable, as tight supply and strong buyer demand continue to drive competitive conditions.
Perth continues to dominate the annual growth figures, with prices surging 20.58 per cent over the past year, followed by Adelaide at 14.91 per cent and Brisbane at 12.51 per cent.
“It’s clear resilient housing demand is defying persistent affordability restraints,” Ms Creagh said.
Brisbane’s sustained growth has seen it become the second most expensive capital city, overtaking both Melbourne and Canberra, with prices up 80 per cent over the past five years.
Adelaide has maintained its position as one of the country’s top performers, with prices rising 0.43 per cent to reach new highs.
“Low stock levels intensified competition, and while the number of properties hitting the market has increased, total stock on market remains constrained as new listings are quickly absorbed amid strong buyer demand, “Ms Creagh said.
She said Sydney’s market has shown renewed vigor, with prices lifting 0.19 per cent to reach new peaks, despite growth being slower than earlier in the year.
“July’s tax cuts have boosted borrowing capacities and buyers’ budgets, which has supported growth. The persistent rise in home values has also motivated many to overcome affordability challenges and transact,” she said.
“Though home price growth regained speed in October, elevated interest rates and affordability constraints are weighing.
“Buyers now have more properties to choose from, and uncertainty around the timing of interest rate cuts remains.”
Ms Creagh said that although price growth regained momentum in October in every capital except Brisbane, Adelaide and Darwin, it was slower than at the end of the summer selling season, as buyers enjoy more choice.
“Significant regional disparities persist in the pace of growth, with differing supply and demand conditions driving varied performance,” she said.
“July’s tax cuts have boosted borrowing capacities and buyers’ budgets, which has supported growth.
She said the persistent rise in home values has also motivated many to overcome affordability challenges and transact.
“Though home price growth regained speed in October, elevated interest rates and affordability constraints are weighing,” she said.
“Buyers now have more properties to choose from, and uncertainty around the timing of interest rate cuts remains.
“Still, prices are expected to remain on the rise as the busier selling season closes out.”
