Australia’s rapidly rising property prices have started to slow, with new figures showing price growth eased last month after hitting a 32-year high in March.
Property prices in Sydney jumped 2.4 per cent in April to a median value of $950,457, according to the CoreLogic Home Value Index released on Monday. The median value is now up 8.8 per cent over the quarter, with prices jumping by 3.7 per cent back in March.
Values in Melbourne increased by 1.3 per cent over the month to a median of $744,679 – down from a 2.4 per cent jump in March – and are up 5.8 per cent over the quarter. The figure includes both houses and apartments.
The slowdown in price rises was unsurprising given the rapid rate of growth seen in recent months, said Tim Lawless, CoreLogic’s research director.
He expected that the pace of capital gains, which is still quite rapid, could slow further in the coming months as the volume of homes on the market increased, and affordability constraints dampened housing demand – with the latest Australian Bureau of Statistics figures showing first-home buyer borrowing activity started to decline in February.
“With housing prices rising faster than incomes, it’s likely price-sensitive sectors of the market, such as first-home buyers and lower-income households, are finding it harder to save for a deposit and transactional costs,” he said.
“If we are starting to see [buyer] demand impacted by affordability constraints, at a time when supply levels are rising, it makes sense that we could start seeing a rebalancing between buyers and sellers.”
Despite the slowdown, every capital city and regional market continued to see prices rise over April.
Nationally, values rose 1.8 per cent over the month to a median of $624,997. It comes after values jumped 2.8 per cent in March, which was the steepest monthly price gain seen since 1988. Values are now up 6.8 per cent over the past three months.
Darwin saw the largest monthly increase of the capital cities, with values climbing 2.7 per cent to $465,976, resulting in annual growth of 15.3 per cent.
All four of the smallest capital cities recorded double-digit annual growth, with values in Adelaide, Hobart and Canberra, up 10.3 per cent, 13.8 per cent and 14.2 per cent, respectively. This reflected a smaller COVID-related disruption and an earlier start to the growth phase last year.
Melbourne recorded the lowest level of annual growth, at 2.2 per cent, due to the larger downturn seen off the back of its extended lockdown period last year. Meanwhile, Perth, which had a three-day lockdown last month, recorded the smallest monthly jump at 0.8 per cent.
Record-low interest rates, an improving economy and high consumer sentiment were supporting the housing market, Mr Lawless said, with values expected to continue rising – albeit at a slower rate – well into next year.