Home prices fell into 2022 as interest rates continued to rise and buyer demand declined. However, in recent months, signs of recovery have begun to appear. Certain regions are leading the price rebound.
according to Prop Track April Home Price Indexhouse prices rose for the fourth straight month.
Growth in the metropolitan area was led by Sydney, Adelaide and Perth, with prices rising 0.40%, 0.41% and 0.21% respectively from March to April.
Washington and South Carolina were the top performers in the region, with home prices rising 0.34% and 0.16%, respectively, over the same period.
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Cash rates are at their highest level since April 2012 and borrowing capacity has declined significantly since April 2022, but demand from buyers remains strong.
In fact, the number of potential buyers per property is still 1.8x what it was before the pandemic.
But why?
In addition to the return of migrants, a shortage of new homes and restrictions on real estate for sale have increased competition.
The lack of supply of new homes in Australia has increased competition for buyers.Photo: Getty
With fewer options and multiple people vying for vacancies, home prices are on the rise again.
Higher demand is more pronounced in relatively affordable suburbs, with many buyers looking for less expensive suburbs as their borrowing capacity dwindles.
To better understand where demand is recovering the most, we focused on the SA4 region, where home prices have recovered the most from the lows.
Regions experiencing the steepest price gains since the last low
| SA4 | GCCSA | % change from recent low | Recent low month | Median AVM |
| Darling Downs – Maranoa | Rest of Queensland | 7.69% | June 2022 | $364,000 |
| Toowoomba | Rest of Queensland | 5.44% | July 2022 | $526,000 |
| Northern Territory – Outback | rest of the Northern Territory | 5.41% | March 2022 | $458,000 |
| Perth – Southwest | Perth | 4.54% | June 2022 | $587,000 |
| Sydney – City and Inner South | sydney | 4.50% | September 2022 | $1,008,000 |
| Perth – North East | Perth | 4.10% | July 2022 | $538,000 |
| Mackay – Isaac – Whitsundays | Rest of Queensland | 3.72% | June 2022 | $428,000 |
| Adelaide – South | Adelaide | 3.68% | September 2022 | $681,000 |
| Adelaide – North | Adelaide | 3.64% | September 2022 | $560,000 |
| Perth – Northwest | Perth | 3.45% | June 2022 | $612,000 |
Darling Downs – Rural Queensland’s Maranoa and Toowoomba top the list, with home prices up 7.7% and 5.4% from June and July 2022 lows respectively.
Active buyers have also increased in South West Perth and North East Perth, with prices rising 4.5% and 4.1% respectively since June and July 2022.
Southwest Perth is one of the areas leading the recovery in house prices.Photo: Getty
Home prices in North and South Adelaide are also up 3.6-3.7% from their recent lows in September 2022, demonstrating strong demand for property in Adelaide.
More Insights from PropTrack’s Team of Experts
Home prices in most of the areas that are driving the recovery are in the Tokyo metropolitan area, below the national median of $737,000. This indicates that demand is returning to urban areas and shifting to more affordable areas.
In the coming months, we expect housing prices to recover in most parts of the country, especially in the greater Tokyo area.
Stabilizing interest rates will likely reduce uncertainty for buyers, but a shortage of supply, international migration and a shortage of new homes will increase competition and prices.