According to the latest released housing value data, the Australian real estate market continues to show an upward trend, potentially frustrating those who hoped to curb rising prices through consecutive interest rate hikes by the Reserve Bank of Australia (RBA).
According to CoreLogic's daily housing value index, house prices in Australia's five major capital cities rose by 0.6% in March 2024. Among them, Perth, Adelaide, and Brisbane saw the highest price increases, rising by 1.8%, 1.1%, and 1.0%, respectively.
In the first quarter of 2024, the average house prices in the five major capital cities increased by 1.7%, with Perth, Adelaide, and Brisbane experiencing more significant price hikes, reaching 5.5%, 3.5%, and 3.1%, respectively.
Since hitting the bottom on January 29, 2023, the rebound in Australian house prices has been significant. Data shows that the average house prices in the five major capital cities have risen by 11.8%, with all major cities except Melbourne experiencing double-digit growth.
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This strong rebound in house prices is mainly driven by record levels of immigration, which has fueled population growth in Australia. According to statistics, as of September 2023, Australia's population growth reached a record 660,000, with nearly 550,000 coming from net overseas migration.
However, compared to population growth, the continued decline in housing construction has led to an extreme shortage of housing supply, triggering homebuyers' "fear of missing out." This means that homebuyers are worried about missing the best time to buy property, leading to increased competition in the market.
If, as expected, the Reserve Bank of Australia cuts interest rates later this year, it may further stimulate the growth of house prices. Rate cuts will lower mortgage rates, stimulate housing demand, and exacerbate the pressure on house price increases.
This situation may be frustrating for some, especially those who hoped to control rising prices through consecutive interest rate hikes by the RBA. They initially expected rate hikes to slow down the pace of price increases, but reality seems to contradict their expectations.
