Aussie property market caps off bumper year but shows signs of cooling

Australian house prices rose 1.0 per cent in December, capping off a massive year for real estate which saw the market soar by 22.1 per cent over 12 months.

But some of the heat appears to be coming out of the market at last, with the monthly gains softening, the latest data from Corelogic reveals.

The 1.0 per cent national house price growth for December is down from a rise of 1.3 per cent in November and a high of 2.8 per cent in March 2021.

Property prices had a bumper year in 2021, but the gains are slowing down in Sydney, and Melbourne recorded its first drop of the year in December. (Peter Rae)

Melbourne was the only capital to see a price drop in December, its first monthly fall since October 2020, with property values down by 0.1 per cent.

In Sydney, house prices rose by just 0.3 per cent, the smallest gain seen by the NSW capital for 14 months.

CoreLogic’s Research Director Tim Lawless said the momentum had shifted in Australia’s two biggest capital cities and a two speed market was emerging.

“A surge in freshly advertised listings through December has been a key factor in taking some heat out of the Melbourne and Sydney housing markets, along with some demand headwinds caused by significant affordability constraints and negative interstate migration,” Mr Lawless said.

Prices in Brisbane and Adelaide are continuing to surge.
Prices in Brisbane and Adelaide are continuing to surge. (AAP)

Brisbane and Adelaide, along with regional Queensland, were the only regions where there was no evidence of value growth slowing just yet, he said.

Brisbane house prices showed a 2.9 per cent surge in December, the highest of any capital city.

“These regions show less of an affordability challenge relative to the larger capitals, as well as better support for housing demand with Queensland in particular showing strong interstate migration,” Mr Lawless said.

“Additionally, we haven’t seen the same level of supply response seen in other regions, with the trend in advertised supply remaining well below average in these markets.”

Over the year, the biggest price gains of any capital city were in Hobart, where house prices soared by 28.1 per cent.

Property prices in Sydney spiked 25.3 per cent for the year, while Melbourne posted an increase of 15.1 per cent.

Corelogic change in dwelling values

National – up 1.0 per cent, up 22.1 per cent

Sydney – up 0.3 per cent, up 25.3 per cent

Melbourne – down 0.1 per cent, up 15.1 per cent

Brisbane – up 2.9 per cent, up 27.4 per cent

Adelaide – up 2.6 per cent, up 23.2 per cent

Perth – up 0.4 per cent, up 13.1 per cent

Hobart – up 1.0 per cent, up 28.1 per cent

Darwin – up 0.6 per cent, up 14.7 per cent

Canberra – up 0.9 per cent, up 24.9 per cent

Combined capitals – up 0.6 per cent, up 21.0 per cent

Combined regional – up 2.2 per cent, up 25.9 per cent

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