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Home price growth reaccelerated in February

Home prices across the country have hit a new high, with growth reaccelerating despite affordability worries.

According to CoreLogic, property prices posted a broad-based rise in February, finishing the month up 0.6 per cent.

Perth continued to be the stand-out performer with a substantially higher rate of growth compared to other cities, up 1.8 per cent over the month. 

Adelaide (1.1 per cent), Brisbane (0.9 per cent) and the regional areas of SA (1.1 per cent), WA and Queensland (both 1 per cent) also showed a consistently high growth rate.

Although growth rates in Sydney and Melbourne home values had levelled out, the monthly trend has reaccelerated, with Melbourne emerging from a three-month slump of negative monthly movements to record a 0.1 per cent rise in February. 

Similarly, Sydney dwelling values have moved back into positive territory over the past two months, after recording a subtle decline in November and December.

CoreLogic Research Director, Tim Lawless, said the ongoing rise in housing values reflected a persistent imbalance between supply and demand, which varied in magnitude across our cities and regions.

“Housing values have been more than resilient in the face of high interest rates and cost of living pressures,” Mr Lawless said.

Mr Lawless said affordability and changing demographics were behind the surge in prices in Perth, Adelaide and Brisbane, while confidence is also returning the the larger capital cities.

“Potentially we are seeing some early signs of a boost to housing confidence as inflation eases and expectations for a rate cut, or cuts, later this year firm up,” he said.

The PropTrack Home Price Index also found national prices rose 0.45 per cent month-on-month in February, the largest monthly increase since October 2023.

All capital cities, except Hobart, had prices rise last month.

Brisbane values have surged 60.7 per cent since the onset of the pandemic and are now on par with Melbourne.

PropTrack Senior Economist Eleanor Creagh said the slowdown in home price growth recorded toward the end of 2023 had reversed this year, with prices hitting a new peak in February. 

“More homes have hit the market this year, but demand has kept up with that increase,” Ms Creagh said.

She said the expectation that interest rates would fall in the second half of 2024 was likely providing a positive tailwind for activity. 

“Housing demand is also being buoyed by population growth, tight rental markets, resilient labour market conditions and recent home equity gains,” she said.

“Meanwhile, the sharp rise in construction costs and labour and materials shortages have slowed the delivery of new builds, hampering the supply of new housing.”

Other than Hobart, all capital cities recorded price growth in February, with Adelaide (up 0.81 per cent), Perth (up 0.56 per cent) and Sydney (up 0.55 per cent) leading the way.

Prices in capital cities have outpaced regional areas this year, but even so, regional areas lifted 0.36 per cent in February to a new peak.

Regional SA (up 1.09 per cent) and regional Queensland (up 0.77 per cent) led growth, while prices
declined in regional NT (down 0.08 per cent).

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Rowan Crosby

Rowan Crosby is a senior journalist at Elite Agent specialising in finance and real estate.