National Home Prices Rise Modestly in May 2024National Home Prices Rise Modestly in May 2024 A recent report from appraisal firm Herron Todd White (HTW) reveals a gradual increase in national home prices in May 2024. The median price for houses and condos combined rose by 0.30 percent in May, and has experienced a 6.68 percent annual growth since May 2023. The current median price stands at $784,000. Factors Contributing to Price Growth According to HTW director Rachel Anderson, the RBA’s decision to maintain the cash rate unchanged has reduced market sensitivity to interest rate cuts. This, along with factors such as steady population growth, a constrained rental market, and high demand for affordable housing, has contributed to continued price growth. Capital City vs. Regional Market Performance House prices in capital cities rose by 0.41 percent collectively and 7.22 percent annually, with a median price of $851,000. In contrast, regional markets experienced no additional growth in May, resulting in a 5.3 percent annual growth rate and a median price of $642,000. Regional Market Affordability Anderson highlights that regional markets offer the best chance of finding affordable housing for those with a budget of $750,000 or less. The lowest median prices are found in the Northern Territory at $409,000, while the highest are in Queensland at $672,000. Growth Trends in Capital Cities Perth emerged as the top-performing capital city, with 22 consecutive months of growth and an astonishing annual growth rate of 20.68 percent. Adelaide and Brisbane also saw strong growth, with annual increases of 14.49 percent and 13.69 percent respectively. Market Challenges in Melbourne and Hobart While Sydney’s house prices have increased by 7 percent since May 2023, Melbourne’s annual growth remains at a modest 0.87 percent. HTW describes this as “static,” with prices still 3.08 percent below their peak in March 2022. Hobart was the worst-performing capital city in 2024, with a -1.93 percent annual growth rate. However, it’s important to note that prices in Hobart have still increased by 34.9 percent since March 2020. Anderson’s Perspective Despite economic pressures, Anderson believes that real estate continues to be a dominant force in Australia. She emphasizes the need to address supply issues and improve housing affordability, while acknowledging the resilience of the housing market.
A recent report from appraisal firm Herron Todd White (HTW) found that national home prices (houses and condos combined) rose 0.30 percent in May 2024 and 6.68 percent year-over-year since May 2023, with the median price now standing at $784,000.
This is the 17th consecutive month that house prices have risen.
Commenting on the firm’s findings, HTW director Rachel Anderson said the RBA’s recent decision to leave the cash rate unchanged indicates “property markets appear to have moved away from the hyper-focus on rate cuts in 2024”.
“Price growth has slowed and the number of homes sold has increased,” Anderson said.
“The national consensus appears to be geared toward continued population growth, tight rental markets with rent growth offsetting higher mortgage payments for investors, and demand for entry-level or lower percentile real estate properties remaining strong.”
HTW further indicated that house prices in the capital cities rose by 0.41 percent collectively and by 7.22 percent annually, resulting in a median price of $851,000.
Notably, no additional growth was recorded in the combined regional markets in May, leaving the annual growth rate at 5.3 percent and the median price at $642,000.
With $750,000 as a base price point, Anderson noted that regional markets offer the “greatest chance that your $750,000 budget will be sufficient to enter all markets, ranging from the lowest median of $409,000 in the Northern Territory to the highest of $672,000 in Queensland”.
Within the capital city markets, HTW reported that the best performing capital city, Perth, recorded an “astonishing 22nd consecutive month of growth”. While Western Australia remains Australia’s most affordable state, it has seen annual growth of 20.68 per cent and low inventory levels.
Adelaide and Brisbane also saw strong growth over the year, with values increasing by 14.49 per cent and 13.69 per cent respectively. HTW noted that the two cities, along with Perth, “saw the most significant declines in total listings over the past year, and the most relative affordability”.
While Sydney house prices have risen 7 per cent since May 2023, HTW described Melbourne’s annual growth of 0.87 per cent as “static”, with house prices in the capital remaining 3.08 per cent below their March 2022 peak.
Nevertheless, the company said that “Sydney and Melbourne may both be able to absorb the higher listing activity”, with Melbourne in particular “offering more choice for homebuyers with 21.4 per cent more listings in April 2024 than the same period last year”.
Hobart took the title of worst performer of 2024, reporting growth of -1.93 percent over the year. Still, prices in the state have risen by 34.9 percent since March 2020, indicating that “each property market is different and behaviors across the country vary depending on the drivers.”
Anderson reflected on the report’s findings, saying that “despite ongoing cost of living pressures, systemic and structural supply issues, housing affordability and unsustainable wage growth, real estate continues to dominate across the country.”
