Property prices 'could become out of control'
With prices surging at their fastest pace since mid-2023, Australia’s major city housing markets could hit the $1 million median mark far sooner than expected.
Just five weeks ago I suggested that by the end of next year (2026), you won’t see a median house price under $1 million in Australia’s ‘Big Five’ cities – Perth, Adelaide, Melbourne, Sydney or Brisbane.
Today, I’m readjusting that thought, suggesting it may come sooner, especially given that house prices are increasing at the fastest rate we’ve seen since June 2023.
It’s seemingly no coincidence that the price growth comes exactly a month after the Federal Government’s new 5 per cent deposit guarantee scheme was rolled out. Just over a month ago, I foreshadowed this would be akin to throwing gasoline on the fire.
Well, the fire is burning and could become out of control.
House prices nationally were up 1.1 per cent in October and 2.9 per cent for the three months leading up to October – running at +10 per cent per annum.
Brisbane and Perth are running at rates equivalent to 20 per cent per annum. Adelaide is not far behind them. Even Sydney and Melbourne are off and running.
Sydney is up 2.5 per cent during the quarter – equivalent to 10 per cent per annum, while Melbourne is up a more modest 1.6 per cent during the quarter – but still the one with most value for mine with the median house price lower than Brisbane, and only marginally higher than Perth and Adelaide.
I think the median house price could rise above $1 million in our five biggest cities as early as the end of 2025, which is just seven weeks away.
Sydney and Brisbane already sit above the $1 million mark. Adelaide, Perth and Melbourne have $75,000 and $25,000 to go respectively before they get there.
The $1 million club is not the only discussion igniting the country. Add to that the talk around interest rates being kept on hold by the RBA last week. Rates are in line with the 10-year average, they don’t need to drop any further for people to act.
Rents are on the up, too. Rents were up 3.5 per cent in the 12 months to August. That number jumped to 4 per cent in October.
If you’ve got properties, sit on them. If you’re thinking of getting a property, get one.
Important note: API Magazine articles are for educational and general readership purposes only. No financial actions should be taken based solely on information contained herein. Interested parties should seek independent professional advice prior to acting on any information presented.
