(CTN News) – Australian home prices experienced their seventeenth consecutive month of growth in June, according to property consultant CoreLogic.
Despite significant demand-side pressures such as high interest rates, a cost of living squeeze, and tight lending conditions, a restricted supply has kept the housing market buoyant.
June Growth Statistics
Data from CoreLogic revealed that national home prices increased by 0.7% in June from the previous month, following a 0.8% rise in May. On an annual basis, home prices surged by 8.0%.
“The persistent growth comes despite an array of downside risks,” noted Tim Lawless, CoreLogic’s Research Director.
He highlighted several challenges, including the country’s cost of living squeeze, interest rates at a 12-year high, housing affordability issues, and stringent credit policies from lenders. “The housing market resilience comes back to tight supply levels which are keeping upwards pressure on values,” Lawless added.
State Capital City Performance
Among the state capital cities, Perth recorded the fastest monthly price growth, with an increase of 2.0%. Adelaide followed with a 1.7% rise, and Brisbane saw prices climb by 1.2%. Conversely, Melbourne experienced a slight decline, with prices falling by 0.2%.
CoreLogic attributed the variation in state price movements to demand-side factors, particularly the high rates of interstate migration in Western Australia, Queensland, and South Australia.
“Interstate migration rates are tracking well above average in these regions,” the report noted.
Economic Context
The broader economic landscape has added complexity to the housing market dynamics. Australian consumer inflation accelerated to a six-month high in May, with a key measure of core prices rising for the fourth consecutive month. This development has increased the likelihood of another interest rate hike this year.
Despite these inflationary pressures, the Reserve Bank of Australia (RBA) has held interest rates steady at 4.35% for five consecutive meetings. However, the ongoing inflation and other economic factors may prompt the RBA to reconsider its stance.
Conclusion
The Australian housing market has demonstrated remarkable resilience amidst challenging economic conditions.
While high interest rates, cost of living pressures, and stringent lending conditions pose significant challenges, the limited housing supply continues to drive price growth.
As interstate migration remains robust in several key regions, these trends are likely to persist in the near term. However, potential future interest rate hikes and inflationary pressures could influence market dynamics moving forward.
