Property prices and rents reach record highs in March, CoreLogic data shows
CoreLogic found the national median value of a home was now over $820,000. (ABC News: Steve Keen)
In short:
House prices and rents reached fresh records in March, but CoreLogic expects the growth to moderate over the coming months.
The rebound in home prices has been attributed to the Reserve Bank's decision to cut interest rates in February.
What's next?
The RBA hands down its latest decision on interest rates this afternoon at 2:30pm AEDT with market pricing suggesting rates will remain on hold at 4.1 per cent.
Australian property prices continued to recover from a short-lived dip to hit fresh highs in March as borrowers and prospective home buyers await a decision on interest rates today.
Data from CoreLogic showed house prices rose in all cities except Hobart last month, with the national median value of a home now over $820,000.
The 0.4 per cent rise in March follows a modest increase nationally in February after three months of declines totalling half a per cent, according to CoreLogic's Home Value Index.
Research director Tim Lawless said March's price rise was due to a "confidence boost" in the market following the Reserve Bank's decision to cut interest rates in mid-February.
He added that it was "probably more about the sentiment lift rather than any real uplift in serviceability or borrowing capacity."
Potential home buyers will be watching awaiting Tuesday afternoon's RBA decision, though most economists are not expecting a rate cut this month.
Even if the RBA cuts in May, Mr Lawless said "modest" rise in the property market would likely be offset by major headwinds including slowing population growth and the fact that houses were still simply unaffordable for many Australians.
"We still have very unaffordable housing prices. Even though sentiment is rising it's doing so from a low base, and we're also seeing some uncertainty around global trade wars and conflict as well,"he said.
"I think overall we still expect there will be some upward pressure on prices but fairly contained, given some of those headwinds."
CoreLogic's Tim Lawless said the rise in house prices would likely be offset by some economic headwinds. (ABC News: Nickoles Coleman)
Data from PropTrack told a similar story, with national home prices rising nearly 0.3 per cent in March according to its index and prices now 3.9 per cent higher than a year ago, up 48 per cent over the past five years.
"February's rate cut boosted borrowing capacities and buyer confidence, helping to reignite demand and reverse the small price declines seen in the months prior," REA Group senior economist Eleanor Creagh noted.
"Buyers who had delayed purchasing decisions due to the sustained higher interest rate environment are likely re-entering the market."
Regions lead the way in price growth
CoreLogic's data showed homes in the regions, especially in Western Australia and Queensland, were outperforming capital cites.
WA's mid west topped the list for annual growth with a gain of 25.4 per cent followed by Townsville in Queensland at 23.5 per cent.
Capital city values were still on the rise with Sydney up 0.3 per cent and Melbourne 0.5 per cent higher than a month earlier.
CoreLogic's Tim Lawless said says we still have "very unaffordable" housing prices. (AAP: Glenn Hunt)
However, in some mid-sized cities including Perth, growth has slowed significantly from the rapid rise that saw dwellings there jump over 75 per cent since March 2020.
"In the last four months the Perth market has been virtually flat. In fact, it looks like that market reached a plateau back in October and since then prices have hardly moved," Mr Lawless said.
Rents at record highs, rental hikes past peak
Those who rent are also facing record high prices with the national rental index rising by 0.6 per cent in March.
Though the report notes that is well below the 1 per cent increase seen this time last year.
Across cities, Melbourne recorded the smallest monthly rental rise while Hobart saw the greatest.
Overall there was some good news for renters with annual rental growth slowing.
Rental growth peaked at 9.7 per cent over the year to November 2021 but has since eased to 3.8 per cent over the past 12 months — the slowest annual change in rents since March 2021.
"We're not seeing anywhere near the same level of rental growth as what we were seeing, say, a year or two ago," Mr Lawless told ABC News.
"For a while there rents were rising at around 14-15 per cent per annum in most markets.
"That's now dropped well down to 3-5 per cent, so I think we're finally starting to see some relief for renters in the sense that rents aren't growing anywhere near as quickly.
"But it's pretty rare to find any evidence that rents are actually going backwards."
Growth in unit rents were slowing more sharply than houses, but it was off a higher base, he said.
"As overseas migration normalises and the average household becomes larger we should see a further slowdown in rental growth," Mr Lawless said.
"However, considering the national vacancy rate, at 1.5 per cent remains less than half the pre-COVID decade average of 3.3 per cent, it's hard to see rents retreating any time soon."