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Adelaide's median property price overtook Melbourne's for the first time on record in August after climbing 1.4% in August to reach $790,789, making it the fourth most expensive capital city behind Sydney, Brisbane and Canberra according to CoreLogic's Home Value Index.
Perth's median home value also surpassed Melbourne's for the first time since February 2015 when the city was coming off the highs of the iron-ore boom, climbing 2% in August to reach $785,250.
National property values saw a 0.5% increase in August, marking the 19th consecutive month of property price increases.
Brisbane's median property price climbed 1.1% in August to reach $875,040, making it the second most expensive capital city in Australia behind Sydney.
Despite this, the pace of property price growth does appear to be slowing, with the quarterly increase in national home values now less than half the rate of growth in the same three month period last year.
CoreLogic's Head of Research Eliza Owen said that while seasonality may have been a contributing factor to weaker price growth over winter, affordability constraints are a key factor.
"The seasonally adjusted Home Value Index had a stronger result through the three months to August, at 1.7%. But this is still down from the 3.3% lift seen in the winter of 2023."
She also noted that the high levels of price growth in Adelaide, Perth and Brisbane aren't sustainable.
"Housing values cannot keep rising at the same pace in the mid-sized capitals of Perth, Adelaide and Brisbane when affordability is becoming increasingly stretched, particularly in the context of elevated interest rates, loosening labour market conditions and cost of living pressures."
Melbourne property values have been declining for six consecutive months.
"The increased tax burden on investment property owners in Victoria, as shown in an annual fall in the number of investment loans secured in the state reported by the ABS, may be dissuading some demand. But it's not the only factor at play," Ms Owens said.
"Supply is also a big factor for Victoria, where the state saw more dwelling completions over the past decade than any other state or territory.
Melbourne's median dwelling value is also highly skewed by the number of units. Around a third of homes in Melbourne are apartments, compared with 16% of homes in Adelaide and Perth.
Relief for renters in sight
Renters could soon breathe a sigh of relief, with rent growth slowing to a halt.
CoreLogic's hedonic rent index remained unchanged for a second month in a row in August, with rent values declining in Sydney also for a second consecutive month.
Annual rent growth is slowing in every capital city market with the exception of Hobart, which is recovering from last years' dip in rent values.
"On the demand side, net overseas migration has dropped, with ABS data showing a decline from 165,000 in the March quarter of 2023 to 107,000 in the December quarter, and overseas arrivals data suggests a fall in international students," Ms Owen said.
"On the supply side, investor trends vary state-to-state, but nationally investor loans secured were up 10.7% in the year to June."
Recent data from the Reserve Bank on average household size showed a slight uptick, which could be suggestive of share housing or multi-generational family homes on the rise in response to high rents.
Photo by Opollo Photography on Unsplash
