Low stock levels fuelling national property price rises

Positive demand drivers, including low stock levels, are keeping a floor under property prices with national values rising for the third consecutive month in March.

National home prices rose slightly, 0.13 per cent, last month to take the year’s cumulative increase to 0.49 per cent according to PropTrack’s Home Price Index.

Sydney experienced the highest price growth of the capital cities, with prices rising 0.27 per cent, while Perth also performed well with a 0.24 per cent climb.

Melbourne values rose 0.12 per cent, while in Adelaide there was a 0.10 per cent increase.

Prices in Canberra moved a nominal amount, 0.03 per cent, while Hobart, Brisbane and Darwin all recorded price declines.

PropTrack Senior Economist Eleanor Creagh said while home prices have fallen from their peak in most markets, prices nationally are still 29.9 per cent above their pre-pandemic levels.

She said while interest rates have been the primary driver of price falls, the recent upturn has been influenced by stock shortages.

“Even though buyer demand is weaker than peak levels seen last year, softness in new listing volumes and tight supply has offset this, leading to a pickup in competition among potential buyers that has buoyed values,” she said.

“While the significant reduction in borrowing capacities and deterioration in affordability caused by interest rate rises implies larger price falls, the impact of rate rises is being counterbalanced,”

“Positive demand drivers offsetting the downwards pressure include the strong rebound in immigration, tight rental markets and slowly increasing wages growth. 

“The sustained softness in new listing volumes is also keeping a floor under prices.”

Ms Creagh said if the Reserve Bank of Australia paused its rate tightening cycle this week property prices could stabilise further and boost buyer confidence.

But she warned that the full impact of previous rate rises may not have fully impacted the market as yet.

“This means the decline in prices could still find a second wind, particularly if new listing volumes increase in the coming months,” she said.


Sydney has experienced the largest price correction of the capital cities, with home prices falling 7.19 per cent from peak to trough. 

But Ms Creagh said the harbour city had also recently seen the greatest lift in values with fewer homes on the market underpinning prices.

“Positive demand drivers stemming from the shortages in rental supply and rebound in international migration are playing a part,” she said.


Brisbane home prices lifted in January and February but fell in March by 0.06 per cent, despite low listing levels.

“Conditions in Brisbane quickly shifted last year due to the substantial tightening in interest rates and prices are now 3.30 per cent below their peak recorded in April 2022,” Ms Creagh said.


Home prices rose 0.12 per cent in March due to lower listing volumes creating heightened buyer competition.

“The constrained level of properties available for sale has concentrated buyer demand and is putting a floor under home prices,” Ms Creagh said.

“Whether this stabilisation continues, or prices resume their fall, will be influenced by the level of supply, as well as the trajectory of interest rates.”


Perth recorded the second highest increase in prices among the capitals in March at 0.24 per cent, to reach a new price peak.

The median value of a Perth home is now $565,000.

“This relatively affordable market has held up better than other capitals over the past year, with prices increasing 3.23 per cent,” Ms Creagh said.

“After Darwin, Perth is the cheapest capital city market in terms of dwelling values. 

“The share of average incomes taken by mortgage repayments on a median priced dwelling in Western Australia is also the lowest in the country, with the exception of the Northern Territory.”


Adelaide saw home prices rise to a new peak in March, lifting a further 0.10 per cent. 

Home prices are up 6.26 per cent on an annual basis, making it the strongest performing capital city market over the past year. 

“The comparative affordability of the city’s homes has seen prices holding up better as interest rates have quickly risen,” Ms Creagh said.

“Low stock levels are also helping to insulate home values, with increased competition among potential buyers.” 


Home prices in Hobart fell 0.43 per cent in March and are now 5.27 per cent below their peak recorded in April 2022. 

“The magnitude of price declines in Hobart has eased in recent months from the faster pace seen in June and July last year when interest rates first started rising,” Ms Creagh said.

“Listing volumes are less constrained relative to the other capital cities and to historical levels in Hobart, giving buyers more choice and removing a pillar of support for prices.”


Ms Creagh said price falls in Canberra had eased in recent months. 

“In March, prices rose slightly by 0.03 per cent and are now 5.98 per cent below their peak in March 2022,” she said.

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Kylie Dulhunty

Kylie Dulhunty is the Editor at Elite Agent.

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