Five capital cities on track to new record prices over the next 12 months

The once cooling Aussie property market will reignite again to record high prices in five capital cities over the next 12 months, fresh Domain forecasting shows.

House prices in Sydney, Adelaide and Perth are set to turn around or hold fast over the next year, according to the Domain Forecast Report.

Unit prices in Brisbane, Adelaide and Hobart are also expected to rally by the end of the next financial year after 2022 price downturns.

House prices in Sydney, Adelaide and Perth, and unit prices in Brisbane, Adelaide and Hobart, are likely to rise to new benchmarks due to the depth and aggression of the recovery.

Population pressure and low volumes of listings placing a floor under prices will contribute to the recuperation across several markets, Domain’s chief of economics and research Dr Nicola Powell said in the report.

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Domain’s exclusive analysis, released on June 22, used real-time behavioural data and economic readings to reveal:

Adelaide will have almost totally avoided the price downturn that afflicted other cities. Price growth of 2 per cent to 5 per cent over the next financial year will land at a record high for houses.

Units will also achieve a new record, data modelling shows.

Sydney’s house market recovery after a historic price freefall will be “slow but steady”. However, it will be powerful enough to send prices rocketing to a new record high by the end of the next financial year.

Units prices will rise but not to the same degree as houses, and will end up below the December 2021 record median price.

In Melbourne, house prices will be stable and despite small gains, will not touch the record prices achieved in December 2021.

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Buyers seeking units in Melbourne will find some entry points open, with outcomes between a -2 per cent price drop and a humble 1 per cent growth expected.

Brisbane vendors should prepare for record house prices by the close of the next financial year.

Unit price growth will be more modest but price rises that have happened already will still push the median to a record sum in the next 12 months.

The median house price in the nation’s capital, Canberra, will stay above $1 million, forecasting shows.

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Hobart’s housing prices will grow again, in a “slow and steady” fashion, Domain researchers found, after five quarters of decline.

However, unit prices, even with only 1 per cent growth anticipated, will nudge close to a new record.

Perth house prices will reach for a new record by July next year. Researchers from Domain say this would mean bullish Perth has avoided a “material downturn” of prices, showing greater resilience compared to other capitals. Unit prices will also go up.

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Darwin was not included in the study.

“Following a financial year of elections, interest rate rises and initial signs of a recovery, we know that people are closely watching what’s to come for the housing market,” Dr Powell said in the report.

She said 130,00 extra homes will be needed in the next financial year alone to house migrants, with the eastern seaboard to welcome the greatest number of arrivals.

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“When you combine this with unprecedented headwinds in the construction industry and unseasonably weak listings, this has contributed to a forecast of continued tight housing supply that drives up market competition.

“While prices are expected to rise, affordability will contain the pace of growth, as the likes of rapidly rising interest rates and ongoing mortgage serviceability challenges continue to play out in a complex and dynamic market.”