The Reserve Bank of Australia’s (RBA) interest rate cuts alongside the imminent introduction of the Albanese government’s 5% deposit scheme for first home buyers have triggered a sharp uptick in Australian home prices.
Cotality’s daily dwelling values index has reported the strongest 28-day growth since March 2024, with values across the five major capital cities rising by 0.8%.
As illustrated above, all major capitals other than Melbourne recorded 28-day growth of 0.8% or greater.
Justin Fabo from Antipodean Macro has performed seasonal adjustments on Cotality’s data. and shows that value growth has accelerated:
The uplift in value growth has been universal across the major capital cities:
Cotality’s auction clearance data has also firmed. As illustrated below, the national capital city auction clearance rate has hit its highest level since June 2023, which portends rising prices.
Based on the above, there is little wonder that Australians have turned bullish on the housing market.
As Justin Fabo illustrates below, Westpac’s latest consumer sentiment survey reported that house price expectations rose another 2.6% in September to a 15-year high:
Westpac’s ‘time to buy a dwelling index’ has also rebounded strongly from its cyclical low:
In other words, Australian house prices are primed to boom, which comes on the back of the Australian Bureau of Statistics this week reporting that the total value of the nation’s housing stock hit $11.6 trillion in the June quarter, equating to $1,017,000 per home.
Australian housing, which is already valued at more than four times the economy, is about to become even pricier.
