Australian House Prices on the Rise

Following on from last month’s shift upward, house prices saw further growth, with all capital cities in Australia—except Hobart—experiencing incremental to substantial increases. In total, Australian capital cities saw a median 0.4% increase in house prices, according to Corelogic^[1] 

What is the Home Value Index?

The Home Value Index (HVI), also known as the Hedonic Home Value Index, leverages recent property sales across the country to track property trends across the country. It serves as a key metric for analysing the performance of the Australian residential property market.

Why Are House Prices Going Up?

The rise in house prices comes down to supply and demand

February’s cash rate likely put more homebuyers into the market, creating competition for properties and raising prices.

On the results, CoreLogic’s Tim Lawless said;

“With the rate-cutting cycle expected to be drawn out, it will be interesting to see if this positive inflection in values can last in the face of affordability constraints.”

Last week saw the cash rate stay on hold, meaning interest rates won’t see another drop until May at the soonest. Meanwhile, the cost of living continues to escalate^[2]. It remains to be seen if house prices continue to surge as strongly as they are when Aussies are paying more for groceries and the same amount on their home loan repayments.

Differences in Growth

While Melbourne and Darwin are experiencing a renewal period, after having been on a downward trend for much of last year, mid-sized cities that were previously reporting significant growth, such as Perth, which spent much of last year as one of the fastest-growing capital cities, have slowed. Sydney, and Brisbane continue to grow healthily.

What Does This Mean for Homeowners?

Rising house prices in most capital cities mean that your house is probably gaining value.

Regional areas are outpacing capital cities in terms of growth, at 0.5%, meaning house prices across Australia appear to be growing on average.

If you’ve had your home for a while, it could be worth accessing the equity in your home; Equity is the value of your existing property less the cost of what’s remaining on your home loan.

With equity you could refinance to a more competitive rate, renovate your home, or even put it towards a deposit on an investment property if you’re looking to build your property portfolio. Chat with us today to explore your options.

What Does This Mean for Homebuyers?

The rise in house prices, despite a cash rate drop, sends a clear message; Homebuyers are out in droves. If you’re looking to buy, now is the time to strike up a conversation with your local MoneyQuest mortgage broker. House prices are going to continue to get more expensive, so get in while you can. Reach out to us today.

What’s Next?

The next Home Value Index will come out at the start of May, and the Cash Rate decision will be made near the end of May.

Until the next cash rate cut, we’ll likely see property prices begin to slow, which means this could be the most affordable houses are for a while. Homeowners will likely see their house grow in value slightly slower but will benefit from higher value properties and slightly lower rates.

If you’re struggling to enter the property market, want to build your property portfolio or are looking for a way to reduce mortgage repayments, get in touch with us today.

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