A new report revealed that while national dwelling prices fell over the latest quarter, house prices in some regions and cities are digging in their heels against the double whammy of rising interest rates and inflation.
The latest Real Estate Market Facts report from the Real Estate Institute of Australia (REIA) showed that the weighted average capital city median price for houses fell by 1.8 per cent over the quarter to June to currently stand at $1,012,230.
Despite the overall quarterly decline, REIA president Hayden Groves pointed out that not all cities recorded declines in the average house price tag.
Data showed that median house price increased in Brisbane, Adelaide and Darwin, with gains ranging from 0.4 per cent to 2.6 per cent.
“This defies the Reserve Bank’s latest comment on potential house price falls and simply demonstrates the current market conditions are the adjustment ‘we had to have’,” Mr Groves stated.
Perth’s house prices remained unchanged over the June quarter at $530,000, the only capital city to record no shift in prices over the period.
“Perth offers great value with the lowest median house price across Australian capital cities, 47.6 per cent lower than the national median,” Mr Groves commented.
On the other end of the spectrum, Sydney, Melbourne, Canberra and Hobart saw declines. But even with the recent price contraction, Mr Groves highlighted that the NSW capital was not dethroned as the most expensive city across the country.
“At a median sale price of $1,552,015, Sydney’s median house price continues to be the highest amongst the capital cities, 53.3 per cent above the national median,” he said.
Over the 12 months to the June quarter, the weighted average capital city median house price increased by 9.2 per cent. Despite the annual gain, Mr Groves revealed this is the lowest year-on-year increase since the December quarter 2020.
The weighted average median price for other dwellings for the combined capital cities also fell 0.6 per cent during the June quarter to $651,142.
During the period, median price for other dwellings rose in Brisbane, remained stable in Adelaide, Canberra and Darwin and declined in Sydney, Perth, Melbourne and Hobart during the quarter – indicating that not all cities are moving in a downward trajectory.
“At $790,983, Sydney’s median price for other dwellings continues to be the highest amongst the capital cities, 21.5 per cent higher than the national median. At $410,000 Perth has the lowest median price for other dwellings across Australian capital cities, 37.0 per cent lower than the national median,” Mr Groves revealed.
Over the 12 months to the June quarter, the weighted average capital city median price for other dwellings increased by 1 percentage point.
The report also reflected the deepening rental crisis across the country, as falling vacancy rates inflated average weekly rents for both houses and other dwellings.
Mr Groves said rents rose sharply following a period of relative stability, with the weighted average median rent for three-bedroom houses in the eight capital cities rising to $506 per week — representing a quarterly rise of 3.6 per cent.
Median rent for three-bedroom houses increased in all capital cities over the quarter, except Melbourne where it remained stable, the report showed.
During the quarter, the weighted average median rent for two-bedroom other dwellings also rose to $474 a week, equating to a quarterly rise of 5.4 per cent. Median rent increased in all capital cities over the quarter except in Adelaide and Hobart, where it remained stable, according to Mr Groves.
The REIA executive attributed the quarterly increase in average rental prices for both houses and other dwellings to the falling vacancy rates in most cities.
While Melbourne still had the highest portion of available rental listings at 4.6 per cent, Mr Groves noted that the Victorian capital has also seen a decline in vacancy rates. Adelaide was the tightest rental market during the period, with a vacancy rate of 0.4 per cent.
“With weekly median rents for three-bedroom homes rising 11.7 per cent in 12 months, the data points toward rental affordability remaining the most significant challenge facing the housing sector for the foreseeable future,” Mr Groves stated.
Nick Bouris, the co-founder and chief executive of Managed App and sponsor of the report, said that their property management platform has also reported a similar trend in rental prices.
“We’re certainly noticing a considerable rise in median rental prices across our national portfolio of property management customers,” he said.