House prices defy RBA's big call: REIA

The Real Estate Institute of Australia (REIA) President, Mr Hayden Groves, said their latest Real Estate Market Facts has found that Australian housing prices fell over the June quarter as rising interest rates and inflation impacted affordability but not all cities and regions are experiencing price contractions.

Combined, the June quarter of 2022 saw a decline in the weighted average capital city median price for both houses and other dwellings across the Australian residential property market.

The weighted average capital city median price decreased by 1.8 per cent for houses and 0.6 per cent for other dwellings.

The weighted average median house price for the eight capital cities fell to $1,012,230 over the quarter.

The median house price increased in Brisbane, Adelaide and Darwin remained stable in Perth and declined in Sydney, Melbourne, Canberra and Hobart. Increases ranged from 0.4 per cent in Darwin to 2.6 per cent in Adelaide.

“This defies the Reserve Bank’s latest comment on potential house price falls and simply demonstrates the current market conditions are the adjustment ‘we had to have’.

“At a median sale price of $1,552,015, Sydney’s median house price continues to be the highest amongst the capital cities, 53.3 per cent above the national median,” Mr Groves said.

“At $530,000, Perth offers great value with the lowest median house price across Australian capital cities, 47.6 per cent lower than the national median. Over the 12 months to the June quarter, the weighted average capital city median house price increased by 9.2 per cent.

“While a significant gain, this is the lowest annual increase since the December quarter 2020.”

According to Mr Groves, the weighted average median price for other dwellings for the eight capital cities dipped to $651,142, a quarterly fall of 0.6 per cent. Over the quarter, the median price for other dwellings rose in Brisbane, remained stable in Adelaide, Canberra and Darwin and declined in Sydney, Perth, Melbourne and Hobart.

At $790,983, Sydney’s median price for other dwellings continues to be the highest amongst the capital cities, 21.5 per cent higher than the national median. At $410,000 Perth has the lowest median price for other dwellings across Australian capital cities, 37.0 per cent lower than the national median.

“Over the 12 months to the end of June, 2022 the weighted average capital city median price for other dwellings increased by one percentage point.” he said.

Rent 'a significant challenge'

Mr Groves said rents increased sharply after a period of relative stability with the weighted average median rent for 3-bedroom houses in the eight capital cities inflating to $506 per week, a quarterly rise of 3.6 per cent.

The median rent for 3-bedroom houses increased in all capital cities over the quarter, except Melbourne where it remained stable. During the quarter, the weighted average median rent for 2-bedroom other dwellings increased to $474 a week, a quarterly rise of 5.4 per cent. The median rent increased in all capital cities over the quarter except in Adelaide and Hobart where it remained stable.

Mr Groves said vacancy rates have dropped in most cities, with Melbourne also falling but still recording the highest at 4.6 per cent while Adelaide has the lowest at 0.4 per cent.

“With weekly median rents for 3-bedroom homes rising 11.7 per cent in 12 months, the data points toward rental affordability remaining the most significant challenge facing the housing sector for the foreseeable future.”