Discover the Surging Property Market: Unveiling Australia’s Major Cities’ Median Property Prices

February saw a rise in home prices following the Reserve Bank’s official interest rate cut. CoreLogic’s national Home Value Index recorded a 0.3% increase, breaking the short downturn that lasted three months and resulting in a 0.4% decrease in the national measure of home values. This rise was seen across every capital and rest-of-state region except for Darwin (-0.1%) and Regional Victoria (flat). It marks the start of a potential shift in growth trends.

It’s important to note that reports claiming Perth, Brisbane, and Adelaide have surpassed Melbourne in median values can be misleading. These reports focus on “dwelling prices,” but Melbourne has double the number of units compared to houses in these other capitals. This skews the median ‘all dwellings’ values.

The recent increase in property values reflects an ongoing imbalance between supply and demand, which varies across different cities and regions. Melbourne stands out with a significantly higher rate of growth compared to other regions, with a 0.4% increase over the month. Adelaide (+0.3%), Brisbane (+0.2%), and the regional areas of SA (+0.6%), WA (+1.0%), and Queensland (+0.5%) also show consistent high rates of capital growth month-to-month. However, most regions are still experiencing value growth below the highs of last year.

Understanding median house prices can be useful for investors as it provides a rough guide to affordable locations. However, it’s important not to rely solely on median prices as they can fluctuate from quarter to quarter and may not accurately reflect the value of a specific property. Factors such as property quality and location within a suburb can significantly impact the value of a property.

Melbourne’s median property prices have risen 8.2% over the past 5 years and 46.9% over the last decade. However, they are still -6.4% below their peak in March 2022. The Melbourne housing market has not performed as strongly as other capitals in recent years, partly due to greater stock availability and lower investor demand. Nevertheless, this presents an opportunity for strategic property investors as Melbourne property values have significant upside potential.

Sydney’s median property prices have experienced a significant slowdown in growth but have improved with lower interest rates. Sydney house prices have risen 28.2% over the past 5 years, and while they are still -1.6% below their peak in September 2024, the unit market has reached new highs. The city’s economy and market sentiment play a significant role in its property market performance.

Brisbane’s housing market has seen substantial growth over the past 5 years, with a 69.7% increase in median prices. The city remains one of the strongest-performing markets, with strong demand for A-grade homes and investment-grade properties. Supply struggles to keep up with rising demand, further supporting home values.

Adelaide’s property market continues to perform well, with prices reaching a record high. The city’s comparative affordability and low stock levels contribute to its strong market performance. Adelaide values have recorded a 5-year growth of 73.8%, and increased competition among buyers helps maintain high home values.

Perth’s housing market stands out nationally, remaining the strongest market for monthly and annual home price growth. However, caution is advised when investing in Perth due to factors such as overpaying by East Coast buyers and the city’s dependence on the mining industry. While Perth has experienced significant increases in house and unit values, the market remains susceptible to downturns in mining and energy sectors.

Hobart’s property market, once the best-performing market, has seen a decline in dwelling values. After rising 29.2% over the past 5 years, prices fell and are still -11.9% below their peak in March 2022. Hobart’s market remains weaker compared to other capital cities.

Darwin’s property market offers the most affordable houses among capital cities. The city’s relaxed lifestyle and low-density population have driven interest in Darwin property. After rising 28.4% over the past 5 years, prices fell 5.9% but are still -2.0% lower over the last 10 years.

Canberra’s home prices rose in February but are down -0.9% from their levels in February 2024. The city’s median house prices have recorded 31.0% growth over the past 5 years but are still 7.1% below their peak in May 2022. The Canberra property market has experienced subdued auction clearance rates, indicating market weakness.