Property prices grew markedly in August, with expectations growing that the spring selling season will see prices escalate further, according to new data.
Growth in housing prices has accelerated as momentum in the property market continues to lift prices to record highs, according to new research.
As Australia welcomes spring, traditionally the busiest time of year for property purchases, new data from property analytics company Cotality and separate research from PropTrack have shown that property prices are already rising rapidly.
Property values rose 0.7 per cent in August, Cotality research found, the strongest monthly gain since May last year.
The rise means that the annual change in prices was higher for the second month in a row, at 4.1 per cent.
Cotality’s data showed that growth remains geographically broad-based, with almost every region recording a rise in values over August. The mid-sized capitals continue to lead growth, with Brisbane (up 1.2 per cent) and Perth (up 1.1 per cent) recording the highest monthly gains.
Growth has been gradually building momentum since the cash rate easing cycle began in February, with buyer demand boosted by a lift in borrowing capacity, real wage growth, rising confidence, and a likely growing sense of urgency as housing stock remains tight.
Cotality noted that buyer demand continues to outpace supply, with advertised listings 20 per cent below average and auction clearance rates hitting 70 per cent, the highest since early 2024. For example, the preliminary clearance rate rose to 76.3 per cent last week across the combined capitals – a full percentage point higher than the previous week (which itself was the highest final clearance rate since February 2024, once finalised).
The group’s Australia research director Tim Lawless explained that vendors are in a strong position as we head into spring, with low competition and rising prices across nearly all regions.
“Once again, we are seeing a clear mismatch between available supply and demonstrated demand placing upwards pressure on housing values,” Lawless said.
“The annual trend in estimated home sales is up two per cent on last year and tracking almost 4 per cent above the previous five-year average. At the same time, advertised supply levels remain about 20 per cent below average for this time of the year.”
However, he said he would be “surprised” if the monthly Home Value Index reached post-pandemic highs (it hit 3.1 per cent in March 2021, for example), given how stretched housing affordability has become.
“What is more likely is that home values will rise at a more sustainable pace, with demand dampened by affordability constraints, more normal rates of population growth and cautious lending policy,” he said.
Values jump 50% in 5 years
PropTrack’s Home Price Index for August showed that home prices rose 0.5 per cent in August to mark the eighth consecutive month of growth.
Home prices have risen 5.3 per cent over the past year, PropTrack found, adding around $47,900 to the median value, and have surged 50.4 per cent in the past five years.
The house price upswing, once led by a few cities, is now spreading more broadly.
Prices in capital city markets rose 0.5 per cent in August and are up 4.9 per cent year on year, with values at record highs, according to PropTrack.
Among the capitals, Darwin (up 0.8 per cent) and Sydney (0.7 per cent higher) led monthly growth, while Hobart was the only capital market to record a fall (down 0.5 per cent).
Regional prices climbed 0.3 per cent in August and were up 6.6 per cent year on year to outpace the capitals and maintain stronger five-year growth, bolstered by affordability and lifestyle appeal.
Over the past year, the strongest home price gains have been in regional South Australia (up 13.3 per cent), Darwin (growing 10.4 per cent), regional Queensland (up 9.9 per cent), and regional Western Australia (9.9 per cent higher).
Looking ahead, REA Group senior economist and PropTrack Home Price Index report author, Eleanor Creagh, said she expects further growth in home prices.
“The combination of lower interest rates, increased borrowing capacities and improved sentiment is expected to continue to drive demand,” she said.
“Constrained new housing supply, strong population growth and the expansion of the Home Guarantee Scheme from October will also maintain upward pressure on prices.
“As we enter spring, the housing market appears poised for another leg higher, albeit strengthening in some capitals while normalising in others.”
