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Australia’s house price growth continues to slow

Australian house prices have grown by 0.34 per cent in March, the slowest since March 2020 according to new data.

The PropTrack Home Price Index report found that while the national market is softening, Adelaide is now the leading capital city housing market in the country with growth of 0.84 per cent last month with regional South Australia increasing 1.04 per cent.

Prices have increased by 25 per cent over the past year in Adelaide, more than twice the rate seen this time last year.

Sydney prices rose 0.32 per cent in March, which is around half of the decade-average monthly pace of growth and substantially below the rate of growth this time last year.

Meanwhile, prices fell slightly in Melbourne (-0.02 per cent), with larger falls recorded in Perth (-0.11 per cent) and Darwin (-0.61 per cent).

PropTrack Economist, Paul Ryan said the higher cost of borrowing has played a role in the market slowing down.

“The slowing in price growth reflects the reduced influence of lower interest rates,” Mr Ryan said. 

“Fixed mortgage rates have already increased over recent months and larger rises are expected as the RBA increases the cash rate – widely expected later in the year.

“The outlook for price growth remains subdued, with the speed of official interest rate hikes the big unknown for the market in 2022.”

Regional markets continue to buck the trend and outperform the capitals in the post-pandemic market. Prices have increased 25 per cent in the past year in regional areas, compared to 16 per cent in the capitals.

Over the past year, Brisbane (27.02 per cent), regional NSW (26.85 per cent), the Australian Capital Territory (26.4 per cent), and regional Queensland (25.35 per cent) have also performed strongly.

Sydney

Momentum in Sydney has been slowing for several months, with annual price growth now at the slowest pace since March 2021. This may be partly due to stretched affordability, with the median house in Sydney estimated to now be worth over $1.2 million.

Melbourne

Home prices were flat in Melbourne, with price growth slowing considerably since mid-2021. Prices increased by 10 per cent over the year to March 2022, the slowest rate since the onset of the pandemic.

Brisbane

Monthly price growth continued to slow in Brisbane, with March posting the slowest monthly result since May 2020.

Adelaide

Adelaide continues to have the strongest price momentum of the capital city markets. Price growth in South Australia was the highest across the country in March.

Perth

Perth continues to be the weakest state capital market, with prices growing less than 8 per cent over the past year. In March, prices fell slightly, with unit prices continuing to fall across the city.

Hobart

Price growth was slower in Hobart in March, with prices rising at the slowest rate since the national pandemic lockdown in early 2020.

Canberra

Price growth continues to be robust in Canberra, which has been one of the strongest performing capital city housing markets over the past year. Regions surrounding the ACT in New South Wales are also seeing strong price growth, showing the strong momentum in our nation’s capital is impacting nearby markets.

Darwin

Price growth reached very high levels in late 2021, but the Darwin market has since slowed considerably, particularly for houses. Weak market conditions look set to continue in Darwin, according to Mr Ryan.

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Rowan Crosby

Rowan Crosby is a freelance journalist specialising in finance and real estate.