Australia’s housing market saw significant growth in May, with Sydney reaching a record high, driven by a supply shortage and rising population, despite high borrowing costs.
Housing values are continuing to rise across most areas and housing types. The common denominator remains a mismatch between housing supply and housing demand.
Mining-hub Perth led the charge with a 2% increase, while Sydney advanced by 0.6% and Brisbane by 1.4%, according to a report from property consultancy CoreLogic Inc. on Monday. Melbourne’s prices edged up by 0.1%, culminating in an overall 0.8% increase for Australia’s major cities.
“Inventory levels in these markets remain well below average despite vendor activity lifting relative to this time last year,” said Tim Lawless, research director at CoreLogic. “Fresh listings are being absorbed rapidly.”
The report highlighted that available housing supply, based on the number of homes advertised for sale over the past four weeks, remains well below average. Capital city listings are currently 16% below the previous five-year average.
Sydney, the most expensive market in the country with a median price of A$1.16 million, matched a record high first set in January 2022, according to Lawless.
Australia’s property market made a surprising recovery last year, despite the Reserve Bank’s aggressive policy tightening to curb inflation. CoreLogic’s national home value index has surged 35.6% since the onset of Covid-19, with Sydney prices climbing 27.2% during that period.
Inventory levels in these markets remain well below average despite vendor activity lifting relative to this time last year.
The RBA’s tightening cycle, combined with a severe shortage of dwellings and booming population growth, has sparked a housing crisis in large parts of Australia. The situation is particularly acute in Sydney, where buyers are being priced out of the market, with the average home costing 13 times the average income.
“To say the housing market has been resilient is an understatement,” Lawless remarked. “Housing values are continuing to rise across most areas and housing types. The common denominator remains a mismatch between housing supply and housing demand.”
