Aus median house price surpasses $1m

New research from Domain has shown the combined median price across Australia’s state capitals has surpassed $1 million for the first time, with all cities except Perth and Darwin hitting new record prices.

Across cities, the median house price during the December quarter was $1.06 million, 6.5 per cent higher than the previous quarter’s $1 million and 25.2 per cent more than a year before, when the median price was $851,883.

Units on the other hand had a median price across cities of $621,880 – 1.9 per cent more than the September quarter’s $610,177 and 7.7 per cent higher than the $577,563 median in the December 2020 quarter.

All up, house prices had risen three times faster than units over the past year.

But combined quarterly house and unit price growth had lost momentum compared to earlier in 2021, with Domain suggesting the pace of price growth had already reached its apex.

Nicola Powell, Doman chief of research and economics, commented prices have continued to beat national records due to “lockdown activity rebounds in Sydney, Melbourne and Canberra, high household savings and the ongoing demand”.

“Demand continues to outstrip supply across a majority of the cities however rapid price growth and affordability issues are likely to shift demand in 2022,” Dr Powell said.

“Price growth has slowed from earlier in 2021 but it is higher than last quarter.”

The Domain report revealed Sydney house prices had risen by roughly $1,100 per day over 2021 – a total rise of almost $400,000 or 33.1 per cent, to a new record of $1.6 million. The year was Sydney’s steepest for annual growth.

In contrast, units increased by 8.3 per cent annually, to their new high of $802,255 – but on a quarterly basis, growth had slumped to 0.9 per cent.

“House prices have grown four times faster than units over the past year, a divergence that has created a record price gap with houses now double the price of a unit,” Dr Powell said.

“The rapid escalation in price is proving to be a significant financial barrier to entry for buyers and upgraders against a backdrop of low wage growth. Housing affordability will continue to weigh on demand throughout 2022.”

In Melbourne, house prices rose by $660 a day over the quarter – the steepest dollar rise on record for a three-month period. The city had recorded 18.6 per cent annual growth, to a median price of $1.1 million (up 5.8 per cent over the quarter).

On the other hand, Melbourne units hit a new high of $593,387, after recording 3.9 per cent quarterly growth, the strongest in two years.

Darwin recorded the highest yearly growth of the capital cities, with a rise of 39.1 per cent, to its median house price for the December quarter of $645,487. The price point was the highest in six years for the Northern Territory capital, although it had only grown by 1.8 per cent over the quarter.

Units had increased by 11.1 per cent to a median of $326,159.

Canberra followed, with a 36.6 per cent yearly rise in house prices, to its median of $1.1 million, making it the second-most expensive city to purchase a house, behind Sydney. However, units had declined by 1.6 per cent from the September quarter, to a median of $555,644 (although they were 9.7 per cent higher year-on-year).

Meanwhile Hobart tracked a 34.6 per cent annual surge to a median house price of $752,110 (up 11.3 per cent from the previous quarter). The December quarter marked the first time buyers could expect to pay more than $700,000 for a house in Hobart.

Brisbane saw its house prices grow by 10.7 per cent over the quarter and 25.7 per cent annually – the steepest increase in almost 18 years. Unit prices grew by 2 per cent over the quarter and 3.5 per cent annually.

In Adelaide, buyers could expect to pay more than $700,000 for a house for the first time on record, with house prices up by 27.5 per cent from the year before, to a median of $731,547. Units also reached a new high of $380,349, 11.5 per cent more year-on-year.

In Perth, house prices were up by 1.8 per cent from the previous quarter and 7.5 per cent year-on-year. Unit prices were up 2 per cent from the September quarter and 8.4 per cent from the year before.

But Domain noted the city’s pace of growth had slowed from earlier in 2021.