Property prices nearly double in some cities over 10 years
Housing values have eased slightly from recent peaks, but analysis of data from property research group Cotality reveals significant long-term growth across major cities.
According to the firm’s April Home Value Index, Sydney home values have declined 1.1% from their recent high but remain 61.6% above levels recorded a decade ago. In Melbourne, values are down 5.4% from peak but have risen 43.8% over 10 years.
Brisbane and Adelaide have both reached new record highs, with prices climbing 91.2% and 93.6% respectively over the past decade. Perth also remains at peak value, up 55.6% in 10 years.
Cotality’s head of Australian research, Eliza Owen (pictured above), attributed the strong price increases to limited housing supply relative to demand, favourable interest rate conditions, and improvements in employment.
“It’s come back to the mismatch of demand for housing, and the rates at which we’ve been able to build and supply and match that demand, so constraints on the supply side,” she said. “There’s also been different financial conditions which have enabled that strong increase in values. Through the COVID period in particular, the massive reduction in interest rates, that created a lasting boom in housing values.”
Owen noted that recent growth in cities like Brisbane, Adelaide and Perth was concentrated in the pandemic era, while a structural drop in unemployment to 4.1% also supported housing demand.
“Australians have been able to attain higher wages growth, and it’s also supported demand for the purchasing of housing, the finance of housing,” she said.
The fall in home values from their peaks is largely linked to interest rate hikes since 2022. Sydney saw a brief rebound to a new high in September last year, but values have since dipped amid ongoing rate pressure and affordability issues.
Other cities, including Melbourne, Hobart and Canberra, have not returned to their former peaks after initial pandemic-era highs. Owen observed that Melbourne’s market has shown recent signs of recovery.
She, however, cautioned that the scale of growth seen over the past decade is unlikely to be repeated, particularly as housing affordability takes centre stage in policy discussions.
“We have a government that’s expressed that they want to see the rate of house price growth slow down,” Owen said. “It seems very unlikely that we would get back to the interest rate lows that were found during COVID, but you never know what kind of crisis could occur in the 2020s and 2030s that could induce a strong monetary policy response.
“Affordability has deteriorated so much that I think it would be difficult for home values to keep rising at the same pace they have in the past 10 years. Not only would it be difficult for home values to replicate that kind of growth but hopefully we’re in a political and social context that we would work at making sure the growth is a bit softer.”
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