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Property prices have nearly recovered all their declines

Property prices rallied again in July and have now nearly recovered all of their 2022 declines, according to PropTrack.

The PropTrack Home Price Index showed that property prices across the country increased a further 0.16 per cent in July, taking them 2.79 per cent above their low in December. 

Prices have also returned to positive annual growth and are now 1.36 per cent above the same time last year.

National values are now just 1.44 per cent below their prior peak, having recover most of their losses.

PropTrack Senior Economist Eleanor Creagh said stronger housing demand and a limited flow of new listings hitting the market have offset the impact of interest rate rises. 

“Although total stock on market has increased slightly, the flow of new listings has remained soft in recent months, leading to increased buyer competition and solid selling conditions,” Ms Creagh said.

“Auction activity has increased, and clearance rates remain firm as home prices lift – this is likely to buoy seller confidence. 

“If the flow of new listings picks up as we head into spring, the pace at which prices have grown this year may slow.”

Ms Creagh said Sydney continues to lead Australia’s home price recovery after also leading the downturn in 2022. 

“Home prices have now risen for eight consecutive months and are now up 5.26 per cent from their low point recorded in November 2022,” she said.

“Prices in Sydney have now regained most of the decline in values recorded in 2022. Sydney home prices are now sitting just 2.22 per cent below their February 2022 peak.”

Home prices in Brisbane were the best performed last month, increasing 0.37 per cent in July to hit a new price peak. 

After rising for seven consecutive months, Brisbane has now regained 2022’s price falls in its entirety, with prices now 1.98 per cent above their levels a year ago.

Adelaide also continues to see incredibly strong growth and was the best-performed capital city market in the country in July with values up 0.62 per cent.

Ms Creagh said Adelaide home prices are now sitting 5.95 per cent above their July 2022 levels. 

“The comparative affordability of the city’s homes has seen prices holding up better amid rapid interest rate rises,” she said.

“Low stock levels are also helping to insulate home values, intensifying competition.’

Home prices in Melbourne rose slightly in July and are now just 1.30 per cent below the same time last year and remain 4.91 per cent below their peak in March 2022. 

Home prices are up 0.97 per cent from their low point recorded in January 2023, making Melbourne a laggard in this year’s home price recovery.

In Perth, home prices bucked the falling price trend seen nationally for much of last year and have continued to climb this year. 

So far in 2023, prices are up 5.13 per cent, after rising 0.36 per cent in July to a new peak Ms Creagh said.

While price growth has been broad-based, the smaller capital cities have lagged in recent months.

Darwin home prices fell by a small 0.08 per cent in July and now sit just 1.22 per cent below their levels a year ago and 2.01 per cent below their May 2022 peak. 

Ms Creagh said unlike many other markets, Darwin has not seen a recovery in prices in 2023, but it also did not see as large a downturn in 2022. 

In Canberra, home prices fell 0.02 per cent and remain 5.91 per cent below their March 2022 peak.

While home prices in Hobart rose 0.21 per cent in July, it still remains the weakest performing market when comparing annual price growth and change from peak.

Ms Creagh said home price growth has been stronger in the capital cities than regional areas this year and this trend continued in July, with regional areas falling 0.03 per cent and capital city prices lifting 0.23 per cent. 

Prices in capitals are now up 3.60 per cent since December, compared to 0.81 per cent for regional areas. 

However, regional markets have still recorded a smaller decline from peak levels, given prices held up better for much of 2022.

Looking forward, Ms Creagh said the property market will have to contend with a number of factors that could see price growth slow down again.

“The full impact of recent rate rises is yet to be felt, and the potential for further tightening remains a headwind for the market,” she said.

“However, interest rates are nearing their peak, if not there already. 

“This is likely to sustain confidence and maintain the lift in home prices, resulting in more markets returning to positive annual price growth.”

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Rowan Crosby

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