Property Market Update March 2023
Like any investment, the value of property rarely goes up in a straight line. There will be inevitably periods of volatility and negative returns.
Property Market Update March 2023
Like any investment, the value of property rarely goes up in a straight line. There will be inevitably periods of volatility and negative returns.
In the 12 months to 31 January 2023, dwelling prices around Australia fell an average of 7.2%1. That may sound like a significant decline, but it’s important to note prices are still 21% higher than they were pre-pandemic2.
Why have property values moved around so much? A key factor has been interest rates – which hovered at record lows for over two years, fuelling house price growth, before rising rapidly back to more ‘normal’ levels from May 2022.
Rising interest rates force many home buyers to rethink their options as it reduces borrowing power. Economist Anne Flaherty estimates last year’s interest rate rises have slashed the average amount a buyer can borrow by about 25%2. Factor in higher living costs due to high inflation, and it’s easy to see why property prices have been impacted.
Interestingly, regional areas have performed better than cities in the last year, down 2.3% compared to 8.7% for capital cities1. This suggests the trend of people looking for a lifestyle shift and lower cost of living may continue for some time yet.
Median dwelling (house/unit) prices at 31 January 2023
| City | Median dwelling price (house and units) | Capital growth last 12 months |
|---|---|---|
| Sydney | $999,278 | -13.8% |
| Melbourne | $746,468 | -9.3% |
| Brisbane | $698,204 | -4.7% |
| Adelaide | $646,045 | 6.9% |
| Perth | $559,971 | 2.7% |
| Darwin | $500,228 | 3.7% |
| Hobart | $666,431 | -9.5% |
| Canberra | $841,605 | -5.9% |
| Combined capitals | $763,110 | -8.7% |
| Combined regional | $574,835 | -2.3% |
