The spring market continues to deliver handsomely for homeowners with national values increasing month-on-month by another 0.7%, according to the latest data from Cotality’s Home Value Index (HVI).
The result, the strongest monthly gain since May 2024, means property prices have now risen 4.1% year-on-year, according to Cotality figures.
If the current growth trends continue for the next six months, Australia may see annual values rise by more than 8%.
Rival researcher Proptrack has put the annual increase in values at 4.9% – slightly higher than Cotality’s figure.
The Cotality index also reported that a new record has been set for the median price of a home – $848,858.
Cotality says the growth cycle has been gradually building momentum since February when the first of three mortgage rate cuts took effect.
Today’s buyer demand had been “spurred by a lift in borrowing capacity, real wages growth, rising confidence and what is likely to be a growing sense of urgency”, said Cotality.
That urgency is being generated by the fact there are approximately 20% fewer properties on the market than the five-year average for a spring selling season.
Also, expectations of another rate cut – it would be the fourth this year – have risen since Australia recorded disappointing unemployment figures.
The percentage of jobless has edged higher to 4.3%. In seasonally adjusted terms, unemployment stands at 4.5%, according to the Australian Bureau of Statistics.
Those with a job are not letting this element of the economy concern them.
Auction rates continue to show strong clearance rates of between 70%-75%, indicating it’s a seller’s market.
Cotality’s head of research, Tim Lawless, said: ”A pick up in the flow of stock coming to market through spring will be good news for buyers, who generally have limited choice.”
Mr Lawless said he expected home values to continue to rise at a “sustainable pace” because of affordability constraints and cautious lending policies among mortgage providers.
The mid-sized capitals are again leading the growth trend, with Brisbane (+1.2%) and Perth (+1.1%) recording the highest monthly gains. Adelaide rose 0.9%.
Another research outlet, PropTrack, reported national home values are 4.9% higher than they were 12 months ago.
Eleanor Creagh , the senior economist at REA Group, which owns PropTrack, said value hikes were being fuelled by lower interest rates, increased borrowing capacity, constrained housing supply and strong population growth.
The Federal Government’s generous reworking of its Home Guarantee Scheme for first-time buyers, which relaunched last month, was already putting upward pressure on prices in the lower tiers of the market, she said.