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Australian property prices could go back to positive annual growth, hitting new highs in January, if the pace of growth sustains.
According to the latest PropTrack Market Insight Report, national property prices could return to positive annual growth by July 2023 if they continue to grow at the same pace as the past quarter, reaching a new peak by January 2024, which would see home prices lift 4 per cent over this year.
Property prices declined 4 per cent in 2022 from their March 2022 peak to December 2022 low, however, they have since climbed 1.55 per cent and are now sitting 2.6 per cent below their peak.
According to the report, Sydney experienced price rebound quickly in 2023, which rose 3 per cent from the low recorded in November 2022, and should this growth pace maintain, prices could return to positive annual growth by the end of June and surpass its prior peak by December this year.
Looking at the other capitals, the report indicated that Canberra and Brisbane have also recorded rapid turnaround prices.
In Brisbane, home prices rose 2 per cent so far this year, on track to return to positive growth by July 2023 and surpass prior peaks by September 2023, while Canberra could return to positive growth by October 2023 and surpass peaks by late 2024.
Furthermore, Adelaide and Perth bucked the trend of falling house prices for much of 2022, with both capitals rising to new peaks in May, up by 2.6 per cent and 3.1 per cent, respectively.
Adelaide home prices hit “fresh price peaks” for the past eight consecutive months and should the pace of growth hold, both Adelaide and Perth will also see new peaks throughout this year.
PropTrack senior economist Eleanor Creagh stated in the report that stronger market conditions are becoming more widespread this year following five months of price growth.
“Housing demand is stronger, likely bolstered by the surge in net overseas migration, as well as very tight rental markets,” Ms Creagh said.
“Given limited new stock is coming to market, buyer interest is being concentrated, which is underpinning home prices and offsetting the downward pressure from interest rate rises.
“If the pace of price growth recorded over the past quarter continues, national property prices will surpass their prior peak by January 2024.”
Ms Creagh added that there may be factors that weigh on the pace of price ahead, such as stronger market conditions improving seller confidence and sparking a boost in stock coming to market and rising interest rates.
[RELATED: Rate hike to 'tip people into financial hardship', warns broker]
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