House prices climbed 8.1% in 2023, the latest CoreLogic report shows, as home ownership continues to appear out of reach for many.
Nationwide, Perth home values surged the most, increasing 15.2%. Brisbane was close behind at 13.1%, followed by Sydney at 11.1%.
These increases have significantly reversed the 4.9% decrease in prices in 2022, but is far behind the record increase of 24.5% in 2021.
Sydney remains by far and away the most expensive place to buy a home in Australia, with its median value now sitting at a cool $1.12 million. In contrast Melbourne, the second most expensive city, had a median value of $780,457.
Nationwide the median value was $757,746.
However despite this, home values in the cities remain below their all time peaks hit during the pandemic in early 2022.
What About Renters?
Renters also had a tough time in 2023, with rental prices increasing 8.3% nationally. Although that is a drop from the 9.5% rise in 2022 and 9.6% in 2021, it is a $46 a week increase in terms of actual cold hard cash.
What’s more, that increase in rents is more than quadruple the average yearly rise during the decade before COVID.
Perth was the worst market for renters, with the city seeing units rents increase 16.5% last year, or $80 in cash terms.
House rents rose 12.9%, or about $73 a week.
Predictions For 2024
As for what 2024 could bring, CoreLogic research director Tim Lawless said predicting trends won’t be easy.
“My best guess would be that rate hikes are probably done,” he said.
“We’ll probably start to see some growing speculation of rate cuts through the second half of the year.”
The report said that house growth was slower in the last two months of 2023 suggesting house prices might not climb as swiftly this year.
“In the first half of 2024, dwelling value growth will be tested by the interaction of high interest rates and weaker economic conditions, both of which are likely to weigh on housing activity. This was already evident toward the end of 2023,” it said.
In other words, inflation is beginning to slow and with more houses coming to market, competition between buyers is lower. Governments are also aware of the housing crisis and are taking steps to stabilise and lower prices, which includes massively increasing Australia’s housing supply.
