Aussie price shock as home prices reach record high after 20 months of consecutive growth

Aussie homes have reached a record new price high for the 20th month in a row – the average cost now sitting more than six per cent higher than a year ago.

National home prices have reached a record new high after recording 20 months of consecutive growth – with sellers entering spring with a strong advantage.

Real estate appraiser PropTrack’s Home Price Index revealed national home prices are now 6.16 per cent higher than a year ago, after lifting 0.22 per cent to a new peak in August.

The report found prices in the combined capital cities increased 6.49 per cent over the past year, with “strong population growth, tight rental markets and home equity gains” bolstering demand.

Prices in the combined capital cities increased 6.49 per cent over the past year, after climbing 0.25 per cent in August.

But these rates differed across the capitals, with the strongest growth being recorded in Perth (+0.79 per cent), Hobart (+0.63 per cent) and Adelaide (+0.45 per cent).

Home price growth over the winter months slowed in Sydney, despite prices being up 0.32 per cent.

National home prices have reached a record new high in August, with prices in the combined capital cities now 6.16 per cent higher than a year ago, Proptrack’s new report found. Picture: NCA NewsWire / David Crosling

Prices in Melbourne fell 0.18 per cent – marking the fifth straight month of decline.

The report also found building activity remained challenged, exacerbated by a chronic shortage of housing.

“Supporting price growth, July’s tax cuts boosted borrowing capacities and buyers’ budgets, while the persistent growth in home prices is likely motivating many to overcome affordability challenges,” PropTrack Senior Economist and report author Eleanor Creagh said.

“As a result, housing demand remains buoyant, defying affordability constraints and pushing prices higher across much of the country.”

The annual change in home prices by capital city, according to the PropTrack Home Price Index. Picture: Supplied

Home prices are expected to lift as activity ramps up into the spring selling season but this is offset by “the expected uplift in choice, the uncertainty around timing of interest

rate cuts and affordability constraints”, Ms Creagh said.

“(They) are likely to dampen the pace of price growth,” she said.

Perth, Adelaide and Brisbane have recorded the fastest pace of growth of the capital cities for much of the past two years, with Perth prices up 23.24 per cent in the past year.

This was followed by Adelaide (+15.12 per cent) and Brisbane (+13.95 per cent).

The growth was also not limited to regional areas – the report finding prices outside capital cities rose regional areas rose 0.16 per cent over the month to be 5.32 per cent above August 2023 levels.

The report found home prices were expected to lift as activity ramps up in the spring selling season, but buyers could face an uplift in choice and uncertainty with rate decisions. Picture: NewsWire / Max Mason-Hubers

Regional Western Australia and regional Queensland led growth in August and over the past year at +0.41 per cent and +0.26 per cent respectively.

But regional Victoria prices were down 1.74 per cent over the same period.

Ms Creagh said tax cuts from July boosted borrowing capacities and budgets, noting the persistent growth in home prices was likely motivating people to overcome affordability challenges.

“As a result, housing demand remains buoyant, defying affordability constraints and pushing prices higher across much of the country,” she said.