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National housing values rose once again during the month of June in a fourth consecutive month of recovery.
PropTrack’s Home Price Index (1 July 2023) found that Australian home prices increased again in June by 0.3 per cent month on month, leaving national prices just 0.1 per cent lower than they were in 2022.
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Similarly, CoreLogic’s national Home Value Index (HVI) also recorded a rise in housing values, up by 1.1 per cent in June, slowing slightly from the 1.2 per cent gain recorded in May.
According to the HVI, the national measure of housing values gained 3.4 per cent since February 2023, although the market still remains 6.0 per cent below the peak levels recorded in April 2022, equivalent of the median dwelling still being $45,771 below a peak of $768,777.
PropTrack’s Home Price Index further indicated that prices are now higher across the capitals than they were last year, with Sydney continuing to lead the price recovery.
Prices in Sydney rose a 0.6 per cent in June, up 4.5 per cent since its trough last year, and 3 per cent lower than the February 2022 peak.
Following Sydney was Adelaide with a rise of 0.45 per cent, Perth (0.34 per cent), Melbourne (0.24 per cent), ACT (0.11 per cent), and Brisbane at 0.08 per cent.
Hobart and Darwin were the only capitals to record a decline during June, falling by 0.36 per cent and 0.08 per cent, respectively.
CoreLogic, also noting Sydney leading the cycle, found that home values increased 1.7 per cent in the capital in June, with the cumulative recovery since the January trough being 6.7 per cent.
According to the HVI, after Sydney was Brisbane with a rise of 1.3 per cent (month on month), Adelaide and Perth tied at 0.9 per cent, Melbourne at 0.7 per cent, and Darwin at 0.5 per cent.
Once again, Hobart recorded a decline in home values of 0.3 per cent.
PropTrack senior economist Angus Moore noted the price recovery continued in June despite the Reserve Bank of Australia’s (RBA) 12 cash rate hikes since May 2022.
“Interest rates will continue to be a headwind for prices, but, unlike in 2022, the peak of interest rates is likely close,” Mr Moore said.
“Higher interest rates are being offset by a limited flow of new properties hitting the market, as well as strong fundamentals for housing demand.”
CoreLogic research director Tim Lawless stated the main factor in keeping upwards pressure on housing values is a lack of available supply.
Furthermore, Mr Lawless noted that although housing values continued to record a “broad-based upswing”, the pace of growth among most of the capitals eased in June.
“A slowdown in the pace of capital gains could be a reflection of a change in sentiment as interest rate expectations revise higher,” Mr Lawless said.
“Higher interest rates and lower sentiment will likely weigh on the number of active home buyers, helping to rebalance the disconnect between demand and supply.”
"My expectation is that further rate hikes would make credit less accessible and weigh on consumer sentiment, which is already close to recessionary lows, ultimately seeing less demand from purchasers."
"The deceleration of value growth in June across most regions could be the first signs of this, but one month doesn’t make a trend, so it will be important to see if the rate of appreciation slows further from here," Mr Lawless added.
[RELATED: Property prices could hit new peak by January: PropTrack]
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