House prices: Record highs reached in May, Perth spikes 20 per cent in 12 months

Aussie house prices have reached record highs in May with one capital city spiking a whopping 20 per cent in the space of a year.

House prices rose to a new record in May, according to new research from PropTrack.

Prices in Perth rose 20 per cent in a year, and nationally prices are up nearly seven per cent on May 2023 prices.

That is set against national wage growth of four per cent in the year to March. Capital city prices are now up 7.22 per cent year-on-year on average.

Homes have never been more expensive in Sydney, Brisbane, Adelaide and Perth.

Melbourne, Darwin, Hobart and Canberra prices were all higher in late-2022.

Sydney, Brisbane, Adelaide and Perth are at their peak, analysts PropTrack reckon. NewsWire / Sarah Marshall

“With housing supply unable to meet demand, national home prices have cycled through 17 consecutive months of growth to hit a fresh peak in May,” PropTrack senior economist Eleanor Creagh said.

Prices and rents were going up in part by building costs and time frames, Ms Creagh said.

“Despite a rise in the number of homes for sale this year, strong population growth, tight rental markets, and home equity gains continue to bolster strong demand.

“This mismatch between supply and demand is continuing to offset the higher interest rate environment,” she said.

Interest stability has given buyers and sellers confidence, making home buyers pay perhaps more than they planned, Ms Creagh said.

“Further, current interest rate stability has sustained buyer and seller confidence, while ongoing home price rises are likely incentivising many to overcome affordability challenges and transact with the expectation of further growth.”

Brisbane prices are now 18 per cent above their December 2022 low, putting values ahead of Melbourne and on par with Canberra. Picture: NewsWire/ Monique Harmer

The PropTrack Home Price Index, released on Saturday, shows Perth stacked on 20.58 per cent more value in the past 12 months to be the biggest gainer in the country.

Adelaide and Brisbane were two and three, the City of Churches’ prices rising 14 per cent year-on-year, while Brisbane went up 13 per cent.

Capital city prices are edging just ahead of the regions for annual growth. Prices in Hobart and Canberra went backwards in May - 0.13 and 0.21 per cent.

PropTrack pegs Perth as having the ‘strongest growth’ for house prices, driven by the relative affordability of the city’s homes, population growth, and very tight rental market supporting home values. Picture: NewsWire / Sharon Smith

Regional prices were flat last month, with only regional New South Wales and regional Tasmania lifting, by 0.16 and 0.12 per cent.

The typical winter slowdown for house sales should run into a slowing of house price growth as a late-2025 interest cut is forecast, Ms Creagh says.