At the end of last year, Australian house prices tended to stabilize, but Tim Lawless pointed out that while the rate of house price increase has accelerated since the end of last year, the quarterly growth trend remains lower than the level seen in the middle of last year when prices rose by 3.3%. This indicates that although there is an upward trend in the market, the pace of growth is relatively slow.

There are significant differences in the magnitude of house price increases across state capital cities. Perth saw the largest increase in house prices, reaching 1.9%, followed by Adelaide (up 1.4%) and Brisbane (up 1.1%). In contrast, growth in Canberra, Sydney, and Hobart was more moderate, increasing by 0.4%, 0.3%, and 0.2% respectively. Melbourne did not experience any growth in March and was the only state capital to record negative growth for the quarter, with house prices falling by 0.2% in the first three months of this year.

There are multiple factors behind this trend. Firstly, the government's housing construction target. The federal government plans to build 1.2 million well-located homes within five years, but the number of housing construction approvals has not shown a meaningful increase, leading to a shortage on the supply side. Lawless stated, "About 12,850 homes were approved for construction in January, which is about 25% lower than the ten-year average and well below the average monthly approval rate of 20,000 homes required to build 1.2 million homes within five years."

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Secondly, the impact on the demand side. Overseas migration reached its peak last year, with a net increase of 548,800 overseas immigrants to Australia by September 2023, all of whom need housing. However, the number of new homes completed during the same period was only 173,993, creating a huge gap between supply and demand.

Economists expect that with the continued decline in inflation, the Reserve Bank of Australia (RBA) may start cutting interest rates in the second half of this year. This will increase borrowers' borrowing capacity, improve consumer confidence, and may continue to support house price growth. In addition, investors are re-entering the property market, which has to some extent driven the rise in house prices.

However, the rising house prices have also raised some concerns. Some Australians believe that buying a home for occupancy is still out of reach, and an increase in investors may lead to the formation of a market bubble. Data from the Australian Bureau of Statistics (ABS) shows that loans offered to investors grew by nearly 20% last year. Currently, nearly 40% of mortgage applicants are landlords.