Property prices across Australia have experienced their most significant increase in two years, rising by nearly $54,000 since the decline in interest rates. This upward trend has been attributed to a combination of factors, including a chronic shortage of housing, heightened investor activity, and supportive federal government policies. As the Reserve Bank prepares for its monetary policy committee meeting this week, which is expected to maintain current interest rates, new data reveals that house and apartment prices grew by 1.1 percent nationally through October.
Significant Gains in Major Cities
This latest increase marks the largest monthly rise since mid-2023, following a substantial surge in property values during the pandemic when interest rates were pushed to historic lows. In Sydney, house values rose by 0.6 percent last month, bringing the total increase for the year to 6.3 percent. The current median house value in Sydney now stands at $1.58 million.
Similarly, Melbourne saw house values climb by 0.9 percent last month, with an overall increase of 4.9 percent since the beginning of the year. The median house value in Melbourne is just shy of $974,000. Smaller capitals also experienced notable growth, with Perth reporting a 1.9 percent increase, followed by 1.4 percent in Adelaide and 1.3 percent in Darwin.
Government Initiatives and Market Dynamics
October also marked the launch of the federal government’s 5 percent house deposit program aimed at assisting first-time buyers. During this period, commercial banks fully passed on the Reserve Bank’s third interest rate cut to existing mortgage holders, further stimulating the market.
According to Tim Lawless, research director at CoreLogic, the ongoing shortage of homes available for sale continues to exert upward pressure on prices. The combination of low supply and increased demand from investors suggests that the trend of rising property values may persist in the near future. As the market adjusts to these dynamics, stakeholders will closely monitor how federal policies and interest rates will shape the housing landscape in the coming months.
