House prices in Australia’s capital cities have risen by up to 20 percent in the past year as immigration reached record levels.
Property values are now at record levels in Perth, Adelaide and Brisbane, while Sydney is just 1.4 per cent below its peak two years ago.
Despite rising interest rates, prices in all these cities rose by double digits in the year to March, new CoreLogic data showed on Tuesday.
Perth led the price rise, with average house prices rising by almost $142,000 to $735,276, but all capital cities except Darwin and Hobart saw significant price increases.
Demand was fueled by a record 548,800 migrants moving to Australia in the year to September, accounting for at least three-quarters of population growth in Australian cities.
CoreLogic research director Tim Lawless said high immigration was causing a housing shortage, causing prices to soar despite the Reserve Bank raising interest rates 13 times in 18 months.
“Despite these headwinds, the shortage of housing relative to demand continues to put pressure on home values,” he said.
“There is still a housing shortage and demand for owner-occupied homes is still high due to interstate and overseas migration rates that are well above average.”
In Perth, the average house price has risen 20 per cent in the past year to $735,276 and remains the most affordable market for Australia’s mainland capital, new CoreLogic data shows (pictured is a swimmer at Cottesloe Beach)
CoreLogic research director Tim Lawless said high immigration was causing a housing shortage, meaning prices rose despite the Reserve Bank raising interest rates thirteen times in eighteen months (pictured are houses under construction in Oran Park at the extreme southwest of Sydney)
In Perth, the average house price has risen 20 per cent in the past year to $735,276, but it is still the second most affordable capital in mainland Australia.
“Focusing on Perth’s extreme growth conditions means that despite such a rapid pace of capital gains, house prices remain relatively affordable compared to the larger capital cities,” Lawless said.
Just a year ago, Perth had an affordable median price of $593,385, but values have since increased by $141,891, including $16,716 in one month.
Perth was also Australia’s fastest growing capital city in the last financial year, with a population growth of 3.6 percent due to strong interstate and overseas migration.
Brisbaneanother major destination for interstate migration, is experiencing annual price growth of 15.9 percent, bringing the average price to $909,988.
Prices rose by $137,968 over the year and by $10,514 in a month in a city with a population growth of 3.1 percent.
Sydneythe city that received the most overseas migrants saw its average house price rise 10.7 percent over the year to $1,414,229 – an increase of $183,648 year-on-year, including an increase of $18,425 in a month.
Despite the increase, house prices in Australia’s most populous city are still 1.4 percent below their January 2022 peak.
In MelbourneDespite heavy overseas migration, house prices there rose only 3.3 percent to $935,049 last year, and even fell 0.1 percent in March.
Melbourne is still 4.1 per cent below the peak reached in March 2022, before the Reserve Bank raised interest rates 13 times between May 2022 and November 2023 to a 12-year high of 4.35 per cent.
Adelaide‘S The median home price increased 13.2 percent over the past year to $785,971, which translates to an annual increase of $90,973 and a monthly increase of $6,057.
Brisbane, another recipient of major interstate migration, saw annual price growth of 15.9 percent, bringing the average price to $909,988 (pictured is a home in Holland Park, where the $1,278,104 center is in the middle)
But turbocharged home prices were not universal HobartThe median price has risen just 0.9 percent over the past year to $692,951, making it the cheapest market for Australia’s state capital.
The Tasmanian capital also had Australia’s weakest population growth rate, at 0.5 percent.
DarwinAustralia’s most affordable capital, saw the weakest annual price increase of just 0.4 percent, bringing the average price to $573,498.
CanberraAustralia’s second most expensive city, saw the average house price rise 2.5 percent over the year to $964,136.
The average house price of $956,782 in the Australian capital is beyond the reach of a worker with an average income of $98,218, who can only buy a $639,375 house with a 20 percent mortgage.
But the median regional home price of $635,707 is within their budget, but only for someone buying on one income.
The average house and unit price in Australia has risen 8.8 per cent in the past year to $772,730.