The Australian housing market continues to show strong growth, with home prices climbing at a brisk pace in May. According to data from property consultant CoreLogic, national home prices rose 0.8% in May, marking the sixteenth consecutive month of growth. This surge in prices is largely attributed to a sustained squeeze on the supply of affordable homes in major capital cities across the country.
CoreLogic’s Research Director Tim Lawless highlights the resilience of the Australian housing market, noting that low supply has kept housing prices insulated from factors such as high interest rates, cost of living pressures, and pessimistic consumer sentiment. Fresh listings are quickly absorbed by market demand, leading to low stock levels and upward pressure on prices.
The data shows that prices have been climbing in state capital cities, with Perth seeing a 2.0% increase in May, Adelaide rising 1.8%, and Brisbane up 1.4%. In Sydney, prices grew by 0.6%, setting a new record high. Despite a drop of 12.4% in values since January 2022, the market has bounced back and prices have risen by 14.1%, with the median value of a home in Sydney now approaching $1.16 million.
Outlook for the Future
A recent Reuters poll indicates that Australian home price rises are expected to outpace overall inflation over the next two years. The failure of builders to boost supply has turned Australia into one of the world’s most expensive housing markets. Despite an increase in vendor activity relative to the previous year, inventory levels in key markets remain well below average.
The Australian housing market continues to show remarkable resilience and upward momentum, driven by a shortage of affordable housing and strong market demand. With prices on the rise in major capital cities and expectations for continued growth in the future, it is clear that the Australian property market remains a key area of interest for investors and homeowners alike.
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