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In the last month of 2023, home prices across Australia’s capital markets did something they haven’t done all year: declined.
The losses, however, were marginal, with the combined capitals recording a 0.09 per cent fall in December, according to data from PropTrack.
The dip was driven by prices in Sydney, down 0.08 per cent; Melbourne, receding 0.55 per cent; Hobart, which fell 0.41 per cent; and Canberra, down 0.66 per cent.
Perth and Adelaide continued to record strong growth, with gains of 0.69 per cent and 0.59 per cent respectively, with Brisbane also recording a rise of 0.27 per cent and Darwin up 0.1 per cent.
Regional areas performed more uniformly in the last act of 2023. The combined regional areas saw prices increase in December, resulting in monthly growth of 0.23 per cent and putting prices outside of the capitals at a new peak – altogether, home prices in the regions rose by 3.2 per cent over 2023.
Regional Queensland and South Australia were the primary drivers of growth, up a respective 0.51 per cent and 0.5 per cent over the month to reach new high points in December.
The growth in regional areas also counteracted December falls in the capital cities, allowing prices to hold steady on a national level. Overall, Australian home prices rose by 5.52 per cent in 2023, according to PropTrack’s data.
PropTrack economist and the report’s author, Anne Flaherty, noted however that though the regions finished the year strong, the capitals still came out on top when considering 2023 as a whole.
“Despite regional areas experiencing higher growth in December, combined capital city areas were the clear outperformers in 2023, with prices up 6.44 per cent over the course of the year versus 3.2 per cent in the rest of state markets,” Ms Flaherty noted.
And while the year finished with home price growth slowing, the economist predicted that competition will pick up as 2024 gets underway.
“Several factors contributed to the slowdown in home prices over the last quarter of 2023. There was an additional interest rate rise as well as an increase in the supply of homes listed for sale, which provided buyers more choice and helped to alleviate competition.
“Even though recent months have seen a rise in the number of properties listed for sale, overall supply remains relatively constrained, particularly in Perth and Brisbane. This has been a key contributor to price rises in these markets,” Ms Flaherty noted.
“Despite the cool down in capital city prices seen over December, prices in 2024 will be supported by population growth and what looks likely to be a more stable interest rate environment,” she said.
ABOUT THE AUTHOR
Juliet Helmke
Based in Sydney, Juliet Helmke has a broad range of reporting and editorial experience across the areas of business, technology, entertainment and the arts. She was formerly Senior Editor at The New York Observer.
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