The one big factor pushing house prices up
Property prices have soared almost 7% this year alone. With the upswing predicted to continue, we unpack what’s driving national housing values higher – and why it could pay to get into the market sooner.
Another month, another round of price upticks.
September marked the eighth consecutive month of home price growth, with CoreLogic saying property values nationally are up 6.6% since January.
That’s a solid price hike. The crazy thing is that prices are soaring despite a whole slew of interest rate hikes over the past 18 months.
So what’s pushing prices higher?
The key factor putting a rocket under property prices is a shortage of homes listed for sale.
Homeowners are sitting tight rather than selling across a number of cities, and that’s increasing competition between buyers.
According to CoreLogic, Adelaide, Brisbane and Perth have particularly low levels of homes for sale – around 40% less than previous 5-year averages.
There’s a bit more choice for buyers in Sydney and Melbourne, but both cities are still recording housing price gains (Sydney in particular).
That’s because rising prices aren’t just about a lack of homes listed for sale.
Record levels of net overseas migration are also a contributing factor.
In the year to March 2023, net overseas migration added 454,400 people to our population. That’s an extra 1,245 people each day, all looking for a home.
And according to ABS data, most immigrants settle in Sydney and Melbourne.
So as you can see, despite high interest rates, there’s upward pricing pressure on the nation’s five biggest capital cities (Hobart, Darwin and Canberra meanwhile have all seen house prices drop over the past 12 months).
Will values go higher?
At the current rate of growth, CoreLogic predicts we could see national housing values reach new highs as early as November.
Already, homes in Perth and Adelaide have smashed previous price records, notching up median values of $618,363 and $691,591 respectively in September.
Brisbane homes look set to reach record values in October, with the city’s current median home value ($761,379) just 0.6% below the previous peak.
What does this mean for home buyers?
As home prices nudge towards new highs, PropTrack says last year’s price falls have been completely reversed.
And most of the data suggests that prices are unlikely to take a tumble any time soon.
That’s because it’s possible that interest rates have peaked, population growth is rebounding strongly, and there is a shortage of new home builds.
Already we’re seeing a surge in home loan applications as more Australians recognise the current market provides a window of opportunity to buy before values rise higher.
No matter whether you’re buying a first home, second home or investment property, buying today could help you beat future price hikes.
So if you’ve got your eye on the property market, call us today and we can help you assess your borrowing power in the current climate, and even help line you up with pre-approval so you’re ready to strike when the opportunity arises.
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