National Home Prices Hit New Record in May Amidst Continued Growth

The Australian housing market continued its upward trajectory in May 2024, marking 17 consecutive months of price growth. National home prices increased by 0.3%, reaching a new record high, propelled by factors such as robust population growth, tight rental markets, and significant gains in home equity.

Despite these positive indicators, building activity remains hampered by capacity constraints and escalating costs, resulting in a tight housing supply and further driving up prices and rents. While demand-side factors are expected to sustain upward pressure on home prices, the pace of growth is anticipated to moderate during the quieter winter period.

Smaller capital cities like Perth, Adelaide, and Brisbane are expected to maintain their outperformance, albeit with slowing growth, owing to low stock levels and strong buyer demand.

As the housing market navigates through challenges posed by supply constraints and seasonal variations, analysts foresee a continued but tempered rise in home prices in the coming months.