The PropTrack Home Price Index shows that the national inflation rate has declined for the first time since the pandemic began. Prices in Sydney and Melbourne continue to fall, with ACT recording its first drop in three years.
Price growth has slowed rapidly nationwide, and the region in May was flat.
Brisbane and Adelaide continue to outperform, with both cities maintaining strong price increases in 2022.
Nationally, home prices have fallen for the first time since the launch of the COVID-19 pandemic.Photo: Getty
The main highlights of the May 2022 report are:
- Australian home prices fell -0.11% in May, the first fall since the pandemic began. Prices continued to fall in Sydney (-0.29%) and Melbourne (-0.27%), but ACT prices fell for the first time in three years.
- Monthly price increases have slowed almost everywhere in the country, with flat results in the rural areas of May. Decreases were recorded in many parts of the country, including WA (-0.43%) and QLD (-0.19%).
- Adelaide and Brisbane are the highest performing capitals of the month, and both markets have countered this trend and continued to grow in 2022.
- Over the past year, Brisbane and Adelaide have been the most prominent growth in the capital, while regional counterparts in Queensland, New South Wales and Tasmania have led non-capital growth.
National price goes down
House prices fell nationwide in May for the first time since early 2020, when pandemic uncertainty peaked.
This fall follows the first rate hike by the Reserve Bank in early May, but house price increases slowed significantly throughout 2022. This follows the expectations of a sharp rise in interest rates in the second half of 2022 as the RBA acts to ease inflationary pressures.
However, this is: The third fastest episode in Australian historyPrices have risen 14% for the year to May and 35% since March 2020. Prices were quickly adjusted to reduce borrowing costs as the pandemic shocked the economy and interest rates fell to record lows.
Rural areas, Brisbane and Adelaide continue to benefit from affordable prices and pandemic changes in taste.
Local prices in May were flat. This represents a sharp slowdown and the slowest monthly results in the Australian region since May 2019. Pandemic.
Prices have risen 21% in rural areas over the past year, compared to only 12% in the capital.
Regional strength is particularly pronounced in New South Wales, Queensland and Tasmania, where growth outside the capital has been around 23% over the past year, but the same background for the smaller capitals of Brisbane and Adelaide. Strong growth was seen from. trend.
Brisbane and Adelaide continued to grow steadily in May, and both markets went against the inter-capital trend to continue to record growth in 2022.
Housing continues to outnumber units nationwide. Since the pandemic, the demand for more space has become clearer, with home prices rising 16% annually and unit numbers rising only 7% over the same period.
The Brisbane region dominates the list of fastest growing regions
Some parts of Brisbane, especially the perimeter of the city, have been prominently functioning in the fastest growing regions of the country over the past year. Exceptional growth was also seen in the New South Wales region.
Looking at the entire capital, the outperformance of the area around the city is clear. These areas became more prominent during the post-pandemic period as homes grew and commuting decreased.
It will be interesting to see if this balance returns to the city center when workers return to the office in 2022 and 2023 and immigrants return.
Prices are now starting to fall nationwide. A clear two-speed housing market continues, with affordable lifestyle regions in Brisbane, Adelaide, New South Wales, Queensland and Tasmania continuing to grow steadily, while prices are flat elsewhere. Or it is falling.
Overall, price growth slowed very rapidly. Annual price growth has dropped from 24% just six months ago to 14% now. Growth appears to remain restrained as uncertainty about borrowing costs disappears.
The 35% rise in prices since mid-2020 could not continue to some extent as it reflects adjustments to record low borrowing costs.
Inflation in early 2022 was expected to raise interest rates, putting pressure on inflation. The RBA showed a move to raise public interest rates for the first time in more than 10 years in early May, and it is expected that borrowing costs will increase significantly at the end of the year. Buyers are now hoping that the affordability of current prices will be further eroded.
May results were flat, but local market price increases were stronger than the capital for some time. It is expected to continue, at least throughout 2022. Australia’s rural areas are still attractive, and despite recent price increases, real estate prices are almost always significantly lower than in cities.
Brisbane and Adelaide, which continued to grow steadily in May, may continue to outperform. They have the charm of city life in larger homes and lower prices.
Investor activity and the continued increase in immigrants could benefit major cities for the rest of the year. Pandemics are changing tastes as both the city center and apartments are relatively cheap and include the types of housing that investors and recent immigrants prefer.
There will be times when strong labor market conditions and wage growth will be traded for higher borrowing costs. Under these conditions, home prices are unlikely to rise significantly.
Official rate hikes and the rate of wage growth continue to be important unknowns for future inflation.
* The PropTrack Home Price Index measures monthly changes in home real estate prices across Australia and provides current views on real estate market performance and trends. The PropTrack Home Price Index uses a hybrid approach that combines repeat sales and hedonic regression. The repeat selling method matches the resale of the same property, but the hedonic regression estimates the value based on the value of a similar property. You can use the hybrid model to match two properties in the same Australian Bureau of Statistics Statistics Area 1 (SA1) region of the same type and control the difference in property characteristics as you would for a hedonic regression. The PropTrack Home Price Index is a revised index that includes the entire past history updated monthly with current transaction information.
** This report is realestate.com.au Internal data and data provided by third parties, including state government agencies. It is as of the time of publication. This report provides general information only and is not intended to constitute advice and should not be so trusted. If you want to cite or refer to this report (or the findings and data contained therein) in a publication, please refer to the report as “PropTrack Home Price Index Report-May 2022”. look Copyright and Disclaimer Report..