The property values of Australia’s most expensive and largest city have exceeded the peak values reached during the previous boom. Strong growth has pushed values even higher throughout the country.

PropTrack’s Home Price Index indicates that the national median home price climbed by 0.36% to a record high in October. The growth in prices has been accelerating in the spring months, pushing the home values of yet another capital city to new forms.

In the cities and regions with the highest growth, property prices have risen since interest rates began to rise.

The prices are at record levels in all four capital cities — Sydney, Brisbane, and Perth — as well as the regional Queensland and Western Australia.

Sydney was the first city to experience a price decline in 2022 after rising interest rates and reduced borrowing capacity triggered a fall in prices. However, since then, values have recovered fully, surpassing the previous record in February 2022.

Since then, the interest rate has increased 12 times. This initially caused prices to drop in many markets, particularly in Australia’s more expensive capital cities.

PropTrack’s senior economist, Eleanor Creagh, explained that the increase in overseas migration has contributed to a strong housing demand. This, combined with the tight rental market and the limited housing stock, has helped to counter the impact of rising interest rates.

“Although new listings have increased during the spring selling period, demand for housing remains strong, resulting in further price increases and a sustained improvement of conditions.”

All capital cities except Darwin saw their values increase last month, while regional Victoria, South Australia, and the Northern Territory recorded small drops.

Melbourne, Hobart, and Canberra home values have risen further but are still lower than the March 2017 peaks.

The change in home prices across the country during October

Sydney

Sydney’s homes are now more expensive than they have ever been after a rise of 0.37%, which took the median value of a home to $ 1.07 million.

Sydney’s median property value, when broken down by type of property, is $1.365m and $800k.

Sydney prices have risen for 11 consecutive months and are up 7.5% in the last year.

Brendan Pomponio, a Northern Beaches real estate agent, said that high construction costs have led to an increased demand for renovated properties, such as the five-bedroom Collaroy house, which is up for auction. Picture: realestate.com.au

The strongest growth has been in Sydney’s eastern and inner suburbs as well as in the north and west. Values have jumped in both pricier suburbs and well-connected affordable areas.

According to Brendan Pomponio of Belle Property Manly Dee Why Mona Vale and Terrey Hills, prices on Sydney’s north beaches have risen by about 8% in the last year due to an imbalance between supply and demand.

He said that there was not enough stock available to meet the demand from people who wanted to live in the Northern Beaches. It’s so tightly held that once people are here, they don’t wish to leave.

Sydney’s north beaches have seen a price increase of about 8% in the last year. Picture: realestate.com.au

Melbourne

Melbourne’s home values rose again in October by 0.28%.

A Melbourne median house costs $924,000, while an apartment at the same price is $626,000.

Melbourne’s values are now 0.64 % higher than they were a year earlier but 3.9 % lower than their peak in March 2022. This is despite the fact that most of this year has seen a rise.

“The price recovery is Melbourne still lags behind Sydney and Brisbane but remains ahead of Hobart and Canberra,” Ms Creagh stated.

Melbourne’s most expensive areas, namely the inner east, are the same as Sydney.

PropTrack shows that Melbourne’s inner-east has had the best performance in terms of house price growth for the city over the last year. Picture: realestate.com.au

While low stock levels supported prices earlier in the year, an influx of new listings was improving conditions for buyers, Marshall White Boroondara director Duana Wolowiec said.

He said, “I was blown away at the number of properties that came on the market.”

There are still plenty of buyers, but we are beginning to notice that they have a bit more choice. They stick to their criteria.”

The price range for this four-bedroom Kew East house with a manicured garden is $3-3.3million. Picture: realestate.com.au

Mr Wolowiec said easing lending restrictions would accelerate price growth, given buyers had become accustomed to the higher interest rate environment.

He said that the market could shoot up very quickly when interest rates begin to ease and confidence begins to rise.

Perth

Perth’s prices grew by almost 11% in the last year. Prices reached yet another record in October with a further 0.52% increase.

“Limited supplies combined with strong demand from buyers has created a seller’s market,” said Ms Creagh. The relative affordability of city homes, the population growth, and tight rental markets also support home values.

Perth’s South West has seen a 12.8% increase in home prices, making it Australia’s top-performing region for house price growth. Picture: realestate.com.au

Despite the big jump in values, Perth is still the most affordable capital after Darwin, with lower prices and a tight rental market attracting interstate investors seeking better returns than on the East Coast, increasing competition for homes.

The southwest and the southeast of the city are experiencing the fastest house price increases in Australia.