Which capital values are slowing the fastest?

While property prices continued to climb to record highs as of November 2023, the spring selling season has revealed slowing price growth in the capital city markets that led the price recovery throughout the year, according to PropTrack data.

Quarterly change in three-month annualised growth has revealed that the Sydney, Brisbane, Perth, and Adelaide property markets are showing signs of property prices easing. Despite this, these markets have maintained positions among the top-performing over the past year.

PropTrack senior economist Eleanor Creagh stated the regions where growth is slowing the quickest are “regions that experienced an exceptionally strong pace of growth through the winter months of this year”.

“For example, the Adelaide Central and Hills region saw house prices lifting 4.56 per cent in the quarter ending August 2023, an annualised pace of close to 20 per cent – well above the long-run average annual pace of growth,” Ms Creagh said.

“Looking at unit price growth the trend is similar, with regions that experienced an exceptionally strong pace of growth earlier this year slowing fastest.

“Unit prices in the Sunshine Coast lifted 4.82 per cent in the quarter ending August 2023, an annualised pace of more than 20 per cent.”

According to Ms Creagh, the slowing pace of growth “is natural” due to the rapid turnaround in prices earlier this year, higher volumes of listing hitting the market relative to winter months, and affordability constraints.

Over the past six months, the quickest price easing has been recorded largely in Sydney regions where choice has improved relative to 2022.

Ms Creagh added regardless of the easing growth in some areas, further growth is expected throughout 2024, albeit at a slower pace.

“Strong housing demand, buoyed by record net overseas migration, tight rental markets, low unemployment, and home equity gains of recent years [have] worked alongside limited housing stock to offset the impacts of higher interest rates,” she said.

“Earlier this year the turnaround in home prices was underpinned by the subdued listings environment that meant buyers were competing for fewer properties.

“However, although the volume of new listings hitting the market has increased in some regions in recent months, the positive tailwinds for housing demand remain.”

PropTrack’s Home Price Index revealed that home prices have “proved resilient” in the wake of the Reserve Bank of Australia’s (RBA) monetary policy tightening, with the index showing that national home prices rose 0.22 per cent in November “to peak levels”, up 5.53 per cent so far over the year and 1.29 per cent above the previous March 2022 peak.

[RELATED: November property prices hit record highs]