According to Domain Analytics, Australian house prices have risen for the sixth consecutive quarter. New record prices were set in Sydney, Brisbane, Adelaide, and Perth in the June quarter.
And with a 7 percent annual rise in homes on the market, sellers maintained their confidence in the strength of the market.
“The housing market remains resilient despite low consumer sentiment, economic pressures, and high interest rates,” Domain’s chief of research and economics, Dr Nicola Powell said.
Market demand is supported by those with leverage on properties they already own and buyers backed by the family bank. A lack of supply has contributed to the price rise.
“Supply remains widely constrained while demand is rising due to strong population growth and a tight rental market,” Dr Powell said. In a note published on Tuesday, JP Morgan researcher Tom Kennedy said Australia’s housing supply is still struggling to keep up, as evidenced by the “significant gap” between new home completions and starts.
It’s suspected that a growing number of abandoned homebuilding projects, or problems within the construction sector, are causing the divergence between the generally highly correlated data sets.
“The [2020] increase in housing starts should lead to a recovery in new housing completions,” he said.
“To date, this dynamic has not occurred, with completion rates remaining low.”
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