Australia’s property market is splitting as two cities race toward $50,000 price jumps while the nation’s largest capitals retreat from their peaks.
Median house prices in Brisbane and Perth are tipped to climb by more than $50,000 by the end of the year, according to Canstar analysis and ANZ forecasts.
According to ANZ’s economic report, released last week, Brisbane property prices are predicted to climb by 9.7 per cent this year.
If this eventuates, it could see the median house price rise by $54,919 to $1.26 million.
Meanwhile, Perth is predicted to deliver the strongest gains through to the end of the year, with dwelling prices forecast to jump 12.3 per cent.
Applied to houses, Canstar analysis shows Perth’s current median price would rise by $51,569 to $1.11 million.
House prices in Australia’s two largest capital cities, Sydney and Melbourne, are set for a very different outcome.
Both have already posted drops this year and are set to continue to slide modestly through to the end of 2026.
While rising rates have put a handbrake on the maximum amount people can borrow from the
bank, a lack of stock will keep prices charging north, according to ANZ economists.
Canstar.com.au analysis shows that a single person earning the average full-time wage, as recorded by the ABS, could potentially borrow $24,800 less from the bank as a result of the February and March RBA hikes.
However, if there are three more 0.25 cash rate hikes this year, as forecast by Westpac, this person’s buying budget could shrink by a total of $58,700 this year.
“It’s a tale of two property markets across Australia in a tug of war between how much the bank will lend, versus how desperately people need houses,” said Canstar.com.au data insights director Sally Tindall.
“The rate hikes have pushed Sydney house prices to their limit, at least for now, which, at a median price of $1.6 million is far from surprising.
“The recent nosedive in consumer confidence on the back of the war in the Middle East and the prediction of up to three more rate hikes still to come will continue to push some buyers to the sidelines, cooling demand in many previously hot property markets.
“For home buyers still in the hunt, news of property price drops will be welcome, but they’re nowhere close to a solve.
“Already, people’s home buying budgets have dropped by far more than the fall in the median house price in cities such as Sydney and Melbourne.
“Brisbane and Perth property prices are managing to defy the cash rate hikes and, if ANZ’s forecasts are realised, their median house prices could both rise by more $50,000 from now through to the end of the year.
“Both of these markets are hurtling towards prices that are fast becoming unaffordable for people looking for four walls and a patch of grass.
“The danger is, people will borrow to the limit, banking on prices continuing to climb.
“If circumstances change – whether that’s interest rates, job security or the economy – it could leave some households overexposed.”
Originally Published in Realestate.com by Property Journalist, Aleisha Dawson. View article online HERE.