$100,000 in a year: Where a typical homeowner has banked six-figure gains

Rising property prices have earned a typical homeowner in some Australian capitals more than $100,000 in equity in the past year, new data shows.

The latest PropTrack Home Price Index shows property prices strengthened further across the country in March, even though more properties hit the market as homeowners sought to capitalise on strong market conditions in most capitals.

Australian home values rose 0.34% in March, while the capital city median increased by 0.4%.

The increase means Australian property prices have reached a new record high, building on last month’s gains.


In Sydney, Australia’s most expensive city, a 8.61% uplift in house prices over the past year has pushed the median value of a typical house to $1.369 millionwhich is about $111,000 higher than just 12 months ago.

Home values in Sydney are now at record highs, as are prices in Perth, Brisbane and Adelaide, the data shows.

Sydney's median home value reached a new record high in March, according to PropTrack data. Picture: realestate.com.au/sold

A typical Perth house now costs $707,000, with the median value about $100,000 higher than a year ago.

Brisbane's median house price is now about $96,000 higher than a year ago, while Adelaide's is $78,000 higher.

All capitals except Hobart recorded an increase in home values in March.

PropTrack senior economist Eleanor Creagh said homebuying demand was keeping up with the increased level of property listings and pushing prices higher.

“Limited housing supply relative to demand has offset the higher interest rate environment and deterioration in affordability,” she said.

“Despite an increase in the number of homes hitting the market this year, demand has absorbed the surge, leading to further price increases.”

How home prices changed around Australia in March

The Reserve Bank held interest rates steady last month, with moderating inflation showing that high interest rates were easing consumption.

But market pricing implies interest rate cuts could begin in September, which would spur further home buying activity as buyers’ budgets get a boost and confidence improves.

“Many expect the next move for interest rates will be down, though timing remains uncertain,” Ms Creagh said. 

“The expectation that interest rates may begin to move lower in late 2024 will sustain buyer and seller confidence.”

“Home buyers increasingly see it as a good time to buy a home and more sellers believe it's a good time to put their property on the market.”

“Prices are expected to lift further in the months ahead, particularly while the expectation remains that interest rates will move lower in the second half of 2024,” Ms Creagh said.

Real estate agent Ben Horwood of Horwood Nolan in Sydney's inner west said there were more homes available to purchase, but still not enough to quench the demand from buyers.

"I think that this spring there will be a lot of A-grade homes come to market from people that have been thinking about downsizing since the pandemic and have confidence that they’ll get a really good price."

"I can't see any reason why we won't continue to get really strong incremental growth, particularly in blue-chip areas."

Supply demand imbalance drives growth in affordable capitals

Strong population growth has fuelled property price growth, particularly in markets where listing volumes remain low such as Perth.

The Western Australian capital recorded the biggest home price increase of the capitals in March, with values rising 0.99%.

Prices in Perth are now 18.62% higher than a year ago – making it the strongest property market in the country by far. This is also the strongest price growth on records back to 2010, PropTrack data shows.

Price growth has been stronger for houses (19.25%) than for units (13.21%).

A significant shortage of homes for sale has driven big price increases in Perth and made upgrading difficult. Picture: realestate.com.au/sold

Record low supply amid strong buyer demand in Perth has resulted in a sellers’ market, Ms Creagh said.

“Buyers in Perth are facing close to record-low choice,” she said. “While affordability has declined significantly as interest rates have risen, WA remains the most affordable state across Australia, which is likely supporting prices as well.”

The latest data from the ABS shows Australia’s population grew by almost 660,000 in the year to September 2023 – a 2.5% increase. Western Australia’s population climbed faster, rising by 3.3% over the same period.

Meanwhile, the total number of properties listed for sale in Perth declined by more than 25% over the year to February 2024, according to the latest PropTrack Listings Report.

While the "massive undersupply of stock" amid strong demand was driving huge price increases in Perth, it was also making upgrading difficult, according to Stuart Cox, General Manager WA at The Agency.

"The biggest problem we have right now is when a seller puts a property on the market, they get strong interest but they can’t find anything to buy," he said.

"If stock levels doubled in Western Australia, we would still be in a sellers' market. I have never, ever seen a market like this."

A shortage of homes for sale in Brisbane, and strong competition for those available, has driven prices higher. Picture: realestate.com.au/sold

Listing volumes are also down in Adelaide and Brisbane, where prices have risen 13.47% and 12.9% respectively over the past year as buyers competed for the limited number of homes on the market.

The relative affordability of these cities’ homes, population growth, and very tight rental markets are supporting home values, Ms Creagh said, while low stock levels are intensifying competition amid strong buyer demand.

Canberra recovery underway as Melbourne picks up steam

Home prices in Canberra jumped 0.67% in March – the strongest monthly growth of all the capitals apart from Perth. This follows a 0.49% rise in February.

Prices in Canberra remained relatively stagnant throughout 2023, but values are now a little more than 2% higher than a year ago, representing the strongest annual growth in the nation’s capital since September 2022.

“With the price recovery in Canberra remaining underway, prices are now 4.34% below their March 2022 peak after recovering just over a third of their decline,” Ms Creagh said.

Canberra home prices increased in March as confidence returns to the market. Picture: Getty

Ray White Canberra sales director and auctioneer Alec Brown said there was a renewed level of confidence in the Canberra market and more buyers felt it was a good time to purchase a property.

"It feels like there’s confidence in the marketplace now that we’ve reached the peak in the rate cycle," he said. "It’s allowed people to get back onto that journey of purchasing again."

"Average bidder numbers are starting to increase and clearance rates are following suit," he said.

Prices in Melbourne are now up 1.71% over the past year — the strongest annual growth since June 2022 — but are still 3.35% below the peak in March 2022.

Meanwhile, prices remained relatively flat in Darwin (up 0.03%) and Hobart (down 0.03%), with both markets yet to recover from the downturn.

Units values rise faster than houses 

The unit market has had a strong start to 2024, with values rising 2% so far – a little faster than the 1.48% growth recorded for houses.

At the national level, unit price growth has outpaced that of houses so far this year, driven by worsening affordability amid high interest rates and price rises. Picture: realestate.com.au/sold

House prices grew significantly faster than unit prices throughout the pandemic, but with the deterioration in housing affordability amid rising interest rates, the apartment market offers a relative discount, Ms Creagh said.

“Strong demand for inner city living post-pandemic, coupled with the rapid rate of population growth and housing supply constraints alongside the relative value units offer are likely buoying buyer demand and pricing in the apartment market.”

Originally published at https://www.realestate.com.au/news/100000-in-a-year-where-a-typical-homeowner-has-banked-six-figure-gains/