- Combined capital cities price growth rate slowed to 0.6%, more than 10 times slower than last quarter
- National median price reached an all-time high, while regional prices outperform capital cities
- Several capitals still breaking price records, while momentum losses in Melbourne and Sydney account for overall deceleration
The Domain March Quarterly House Price Report released today revealed that the Australian property boom appears to be cooling off.
While housing values are still growing for the time being, the current combined growth rate for Australia’s capital cities is now 10 times slower than last quarter.
Domain data indicates the median house price growth rate has fallen from 6.3% in December of 2021 to a low of 0.6% in March of this year.
Capital city price growth slowing, as regional outperforms
Despite price growth losing momentum, buyers aren’t completely out of the woods yet with median house price in capital cities reaching an all-time high of $1.07 million.
Activity in the unit market is looking more favourable for buyers however, with combined capital cities prices declining by 1% to settle at a median of $616,942.
The fall in unit prices represents the first time a decline has been seen in the sector since June of 2020.
Quarterly change of median house and unit price
Dr Nicola Powell, Domain Chief of Research and Economics, said buyers may gain some reprieve from the news that annual growth has reached a 12-month low.
“While each city’s figures vary, we’re seeing Australia settle into a ‘new normal’, including increased interstate movements, ease of restrictions and return of international workers, which is prompting shifts in the property market.”
Dr Nicola Powell, Domain Chief of Research & Economics
John Foong, Chief Revenue Officer of Domain, echoed Dr Powell’s sentiments that house price growth is beginning to cool across the capitals.
“While the balance between supply and demand is slowly changing and creating great options for buyers, it’s also prompting a change in seller price expectations, with figures such as auction clearance rates experiencing a drop in some cities.
Though Domain’s latest report points positively to cooling prices on a national scale, prospective buyers are encouraged to keep an eye on prices closer to home.
“As we see this latest change play out in our property market, knowing, and adapting to, the shifts in your local area will be key to continuing to drive strong results for your customers,’ he said.
Showcasing the impact of location on price data, regional areas continue to strongly outperform Australia’s capital cities.
The regional median house price grew by 3.1% over the last quarter, and an astonishing 20.8% over the past year.
A record-breaking quarter for many capitals
Sydney housing values have come almost to a standstill with a nominal 0.2% increase in the last quarter, the weakest growth rate since June of 2020.
The city previously underwent a significant upswing, fueled by lacking supplies and strong buyer demand, though shifting conditions have seemingly put an end to steep growth.
Dr Powell added flatlining prices will help empower buyers, enabling greater choice and forcing sellers to keep pricing realistic.
“2022 has seen the highest number of newly advertised homes for sale over a March quarter since 2014, soaring 15% above the five-year March quarter average.
“Sellers have become motivated and are strategically timing a sale while prices are at or are close to a peak and prior to a tightening rate cycle that will impact borrowing capacity and the cost of a mortgage.”
Stratified median house prices
In Brisbane, Adelaide, Hobart and Perth however, prices are reaching new heights.
Brisbane currently holds the title of Australia’s fastest-growing capital city market, with the median housing value increasing by 3.1% last quarter and 32.1% annually.
Adelaide and Hobart set new records in the March quarter, as house prices grew 3% and 4.3% respectively. As for Perth, prices increased by 1.5% in the last quarter to reach a record median of $622,030.
Melbourne and Canberra’s house prices fell on the other hand by -0.7% and -0.9% respectively, both for the first time since early to mid 2020.
According to Dr Powell, falls in price growth can be attributed to increasing supply levels in both of the cities.
“Melbourne’s property market is witnessing more homes being listed for sale than being purchased, continually showcasing greater purchasing power to buyers.”
Dr Nicola Powell, Domain Chief of Research & Economics
Housing prices also fell in Darwin by 1.8% in the last quarter, perhaps indicating that demand in the capital was short-lived.
“Homeowners have reacted sharply to rising prices, as the number of newly listed homes for sale has risen, providing the highest volume for a March quarter since 2015.
“Weakening demand at a time of rising newly advertised homes for sale has resulted in a build-up of supply, 21% higher in March compared to the same time last year,” said Dr Powell.
