SBS website reported on June 7 that with interest rates lower, Australian house prices have risen to record highs last month.
PropTrack's latest Home Price Index noted that while house prices in all capital cities rose in May - Sydney, Brisbane, Adelaide, Perth and Darwin all hit new highs, Melbourne had the strongest monthly gains at 0.79%.
The report shows that housing prices across Australia rose by 0.39%, the fifth consecutive month of growth, up 4.12% year-on-year. "As interest rates fall, housing prices have increased and expanded, and housing prices have risen in May in all capital cities."
"House prices in capital cities have become consistent, and Melbourne, which had previously been slow to grow, is now starting to accelerate."
(Image source: SBS)
The report said Melbourne is recovering from "long-term weak growth" and the current median home price in the city is AU$782,000, still 2.85% below its peak.
Melbourne is also the only capital city in May to drop year-on-year (-0.38%). Meanwhile, the median home price in Perth is $787,000, surpassing Melbourne for the first time in a decade.
Perth's monthly gain was 0.27%, compared with 0.24% in Brisbane.
Creagh said: "House prices in cities such as Perth and Brisbane tend to ease after strong increases, and the growth of all capital cities is due to the improvement of buyer sentiment and recovery of confidence after interest rate cuts." Apart from Melbourne, Adelaide and Sydney ranked among the top monthly gains, at 0.52% and 0.39% respectively.
Outside capital cities, housing prices in remote areas rose by 0.25%, with an annual increase of 5.19%, exceeding the overall growth rate of capital cities (3.71%).
In May this year, interest rates were cut to their lowest level since 2023 for the second time.
Creagh said this "improves borrowing capabilities and stimulates buyer demand."
"Potential buyers are shifting from waiting to accelerating home purchase decisions as further price increases and interest rate cuts are expected to cut rates again at their July meeting, analysts said, despite the RBA's plans to lower inflation, as GDP data shows an economy stagnation.
