Australian home prices have continued to rise for the seventeenth consecutive month in June, with a 0.7% increase from May. This upward trend has persisted despite various downside risks such as the country’s cost of living squeeze, high interest rates, housing affordability issues, and strict credit policies from lenders. The CoreLogic Research Director, Tim Lawless, highlighted these challenges but emphasized that tight supply levels have been the driving force behind the resilience of the housing market.
The monthly price movements across state capital cities have shown varying trends, with Perth experiencing the fastest growth at 2.0%, followed by Adelaide at 1.7% and Brisbane at 1.2%. However, Melbourne saw a slight decline of 0.2% in prices. These fluctuations can be attributed to demand-side factors, particularly interstate migration rates which have been above average in Western Australia, Queensland, and South Australia according to CoreLogic.
Recent economic indicators have also played a role in shaping the housing market landscape in Australia. Consumer inflation reached a six-month high in May, while core prices rose for the fourth consecutive month. This data has led to speculation about the possibility of another interest rate hike by the Reserve Bank of Australia, which has maintained a steady rate of 4.35% for the past five meetings.
The Australian housing market continues to defy the odds by sustaining its growth streak in the face of numerous challenges. While downside risks remain prevalent, the tight supply levels in the market have managed to keep upwards pressure on home values. The regional variations in price movements further demonstrate the nuanced factors influencing the market dynamics. As economic indicators point towards a potential interest rate adjustment, stakeholders will need to closely monitor these developments to navigate the evolving landscape of the Australian housing market.