Latest Housing Market Stats – Lower Rates Drive Home Prices Higher Over April

Well, it's been another fascinating month for our property markets with the forecast of lower interest rates giving buyers a fresh dose of confidence. House prices have continued their upward momentum in most capitals in April and unit prices aren't far behind either. But with affordability pressures still in play and supply challenges persisting, it's clear there's a lot more going on underneath the surface than just rising prices. And despite all those ongoing overseas tariff tensions and global economic uncertainties and geopolitical problems that could have easily rattled confidence, our housing markets have continued to rally strongly. So to unpack the latest numbers and the trends and what they really mean for property investors and home buyers alike, I'm joined once again by Australia's leading housing economist, Dr. Andrew Wilson, chief economist of MyHousingMarket. Hi, Andrew. Yes, hello, Michael. And we've had a very unusual April, of course. We've had consecutive weekend holidays. So I guess, you know, if you don't have the benefit of holidays, you'd be a little confused about what actually, what day it is. But we've had Easter and then back to back with Anzac Day. And of course, we'll be getting distracted by a federal election this coming Saturday. But as you said, it hasn't seemed to affect the housing market at all. It's just kept on keeping on. Look, we always say March and April with an uptick in prices growth. And that's because we're coming off those weaker periods of December, January, and February, because we're distracted by holidays and not the full return to work. So you always see, because there is less demand and less supply during those holiday periods, lower prices. Even though our data does adjust for seasonality to some degree, at the end of the day, you just can't stop the impact of, you know, particularly fewer higher priced properties in the marketplace. So in that context, we're still seeing some very solid, dare I say, strong growth coming through over the past two months. And we shouldn't be surprised, Michael, as we've discussed here, consistently lower interest rates mean higher prices, house prices. And the interesting thing about lower interest rates now is that they're coming, and it's the beginning of the lower interest rate cycle, we would presume. Well, it is the beginning, because it's the first interest rate cut for some time that we had in February. And we're having it in conjunction with the still very strong economic conditions. There's just no doubt about that. You're looking at the generalised data, the labour market's still strong, retail sales are still high. Even though we're still struggling with that inflationary breakout of the last couple of years, even though inflation, the growth of inflation or inflation is lower now, and within the range of the Reserve Bank, it hasn't gone backwards. So we're still paying, you know, high prices. Some people pay $7 for a cup of coffee, I think, around the place. So that sort of says it all. So, but as you said, the housing market just keeps on keeping on. And, you know, the jungle drums are beating quite loudly that we'll get another interest rate cut, Michael, over May. And that will only help to reinforce what is rising confidence and to address affordability, because of course, a lower interest rate means technically with the same income you can afford to pay more for a property. And as you also mentioned, there's no getting away from the fact that we're chronically undersupplied for housing in this country, similar to a number of other similar economies and the government and the opposition have recognised that and it's become part of their mantra in terms of what they're promising for if they win government going forward. So again, it's reinforced by the latest data. So about the latest data, my housing market provides a different depth of data to some of the other data that's going to come out in the next couple of days. So I think it's worth explaining that you're going to, in a moment, be sharing house prices and unit prices, while other research houses often talk about dwelling prices and it's really hard to compare apples with oranges when you do that, because Melbourne's got a much larger percentage of apartments than houses. And so if you look at Melbourne dwelling prices compared to Perth dwelling prices, you can't totally compare them right. And then you also talk about quarterly price increases. So it's actually not what's happened in the last quarter, but comparing the April quarter, now you're going to share with the March one. And what's the reasoning behind that, Andrew? Well, look, it gives us, we need a solid set of data because it's a statistical measure and logic tells you that the more sales data that you have, the more reliable your outcomes are. But we don't want to be, as some other providers do, have to wait for the major quarters to get our results. That is, you know, the March, June, September and December quarters. But what we can do is take the quarters as they advance each month. So we're getting three months of data and then we're advancing it month by month by month. So for example, this month, we're looking at three months to April and we're comparing that to the three months to March. So we get that ongoing rolling trend, which gives us a real sense of how markets are performing. And even though, as I mentioned before, there are still some constraints in regard to seasonality, you really can't get away from that unless you start interpolating the data. And once you start doing that, it means that you're giving a subjective analysis rather than an analysis based on the data per se. And as we've seen, seasonality can change as it did quite significantly through the COVID period where stronger periods became weaker, typically weaker periods became stronger. So that's the background to our data and our methodology uses the same techniques that the ABS used when it was doing its house price data. And that's derived from the Reserve Bank white paper on house price methodologies. And that's why our results are broadly similar to all the other providers. It's just that we come in earlier and we sort of mix between quarterly and monthly. So I think it's important to get a real feel for what's happening in the housing market without erratic data that you'd get with just one month's worth of sales, but, and also understand the trends and to be looking more in a real time environment. So shall we get on with the numbers, Mike? Yes, please. Let's do that. But it was another positive month for our national housing market with the median house prices up by 0.8 of a percent over the April quarter compared to the March quarter. The new national median house price, these are weighted average capital city house prices. In other words, it's a weighted average based on the level of activity in each of the capital cities. So it is skewed, of course, to the larger markets, Sydney, Melbourne, and Brisbane, but the latest median house price over April is at $1,177,737, Michael. And as I mentioned, that's a 0.8 of a percent increase over the month. And if you multiply, of course, that by 12, if we can just relate that to saying that's quite a strong result because that's pushing- Very much so, yes. Bigger annual result. And it's the same as we had over the March quarter. In fact, it was the highest monthly increase, again, since April 2024, in line with the same result over the March quarter. And over the past year, national house prices are up by 4.3%, Michael. Now, all capitals except Canberra reported increases in house prices over April. Adelaide was the top performer up by 1.4%, followed by Hobart, which was up by 1%. Melbourne and Brisbane up by 0.9 of a percent. Sydney up by 0.8%. Darwin up 0.6 and Perth higher by 0.1 of a percent. Now, the interesting thing, and as I mentioned, Darwin fell marginally by 0.1 of a percent. I think the interesting, when we're looking for trends, Michael, in the data, I think we've got two trends that are emerging other than the consistency of most of the capitals. And that is we're certainly starting to perhaps see a little bit more life in that Melbourne market as well, more consistency coming through. Of course, we know Melbourne's been, for whatever reason, quite subdued over the past couple of years where other markets have grown reasonably strongly. But we are now starting to see more consistency in Melbourne house prices. The other thing that's interesting, Michael, is the previous leader of the pack, and that's the Perth housing market, has now shown some weakness over the last two months, which is unusual given just how strong that Perth housing market has been. But again, it just, even though prices fell over the last quarter, the March quarter compared to the February quarter, but they're up just marginally, Michael, by 0.1 of a percent. So still some, I guess, some levelling off in that strong growth in the Perth housing market. Its median is still lower than the other major capitals. And of course, we know Perth has the strongest capital city income. So affordability isn't such a big deal for Perth when we compare it to the other capitals, the other major capitals, given that they have higher wages and lower house prices. So interesting there, just perhaps reaching the peak of the cycle in Perth, and which has been rising quite strongly for some time. But Perth's still up 12.5% over the past year, Michael. Those annual growth levels are now starting to ease. Latest up 10.7%, Brisbane up 8.8%. And Melbourne, even though we're seeing some more encouraging signs for prices growth there, is still down by 1% over the past year, but that is now starting to narrow. And I guess on the trend, we would expect to start to see Melbourne above the line over the next couple of months. But unit prices were also higher again over April, Michael. Unit prices have been a little bit less affected by the seasonal impacts, as I mentioned, of December, January, February, and that's because there's less seasonality in the unit market. It's more of an even market. We don't have the same sort of prestige unit sales as we do in the house market, that wane and decline through that holiday period. But up by 1%, the national unit market, again, this is a weighted average of capital cities based on their activity levels. And that means mainly when we're talking about units, the Sydney, Melbourne, and Brisbane markets, where the great majority of unit activity occurs. So up 1% to 673,830, and national unit prices, weighted average capital city unit prices, up by 3.8% over the past year. The smaller markets tend to produce higher results than the more established, or the larger capital city markets, because they have smaller numbers of units, so it can tend to be volatile from period to period. Hobart was the top performer, and that, of course, has a very small unit market. The Melbourne market prices up by 3.1%. Adelaide, another strong result. Adelaide up by 3%, Darwin up by 2.5%. Melbourne, again, similar to houses, and perhaps even stronger than houses. Melbourne unit prices have been on the rise again, and again, some good portents for a breakout. Maybe we could say a long-awaited breakout in the Melbourne housing market with confidence returning. Brisbane up by 1.3%, Sydney up marginally by 0.7%, and Perth higher by 0.3%. Canberra, similar to houses, prices were down by 1.1% over the months. Some positive results there, all in all. Canberra's dragging the chain, Michael. As I said, with Perth moving from top of the pops down to an underperformer, who would have believed that? But again, it's just part of the cycle, running out of puff. But with the prospect of lower interest rates, I would suggest these results will continue. And of course, the other point is we're moving into May, Michael. No holidays in May. Well, I think Brisbane has a holiday next week, but other than Labor Day in Brisbane, we'll be certainly a lot less distracted by long weekends, as we've been quite remarkably over April, as usually occurs, of course. It's just that consecutive three weekends of distractions that haven't really affected prices, but we'll be up and running more consistently over May. So with, I guess, a lot of chat around the likelihood of an interest rate cut, that will only help to fuel more activity in our housing markets. And as you said, not just the issues of cycles reaching their peak have impacted the market or the holiday period over April, but also a lot of the nonsense that's been promoted in the media in regard to the prospects of economic doom and gloom as a result of the international tariff position, the US tariff policies. It seems that buyers and sellers have largely ignored that as well, Michael, going forward. And as I said, these are good solid results, again, as we move into the middle of the year. I just wanted to remind you that this is not specific investment advice because we don't know your personal circumstances, but we're more than happy to have a chat to help you take advantage of the opportunities the current property markets are offering. So why not have an obligation-free chat with one of the wealth strategists at Metropole to discuss your goals, your options, and what you could do. We're much more than just another buyers agent. We help you safely create intergenerational wealth through strategic property and wealth advice. Remember, property investment's a process, not an event. So you can't just go out and buy any property and hope to be successful. In fact, now more than ever, getting the right advice is critical. So if you're looking to invest in property or buy a home, go to metropole.com.au and organise a time for an obligation-free chat. You're going to find that at Metropole, we're big enough to tip the scales in your favour, but still small enough to care. And since we don't have any properties to sell, our advice is independent and unbiased. Well, there's not the prospect of just one interest rate cut coming in this coming month of May, but the money markets are suggesting multiple ones. That's based on the fact that they're concerned that Australia is going to fall into a recession, the economy is going to weaken. Now, we in our weekly Property Insiders Chats, or you in particular, have informed and explained your opinion on that. So every Monday we get together, and Tuesday morning this is released, our Property Insiders. So if the people watching this haven't subscribed to this YouTube channel yet, just click on the little bell icon so that you can become a regular subscriber and get Dr. Wilson's current thoughts. But the underlying fundamentals mean that at the end of this year, property prices are likely to be considerably higher, Andrew. Population growth is continuing on. We're going to see what the result of the election is, but if the Labor Party wins, as is currently suggested, they're not talking about cutting immigration at all. They're handing out money to first-home buyers, and that sounds like a fun election promise, but it's not going to help affordability. It's going to kick the can of affordability issues down the road if you give first-home buyers lots of extra money. There's talk about building a few more social houses, but really, all this is going to fuel the flames of a property boom, or a property strong market rather than a boom. I wouldn't like to use the word boom. Well, I certainly support what's already strengthening housing markets this year, Michael. The governments just don't get it. The problems are not on the demand side. You know, why throw dollars at first-home buyers? It's just about trying to, you know, curry favour and win votes. The real issues for Australian housing markets, just for most other housing markets in similar economies, is supply, and there's nothing that the federal government can do about supply significantly to bring balance back between supply and demand. I mean, we only have to look back a couple of years to some of those promises that the Labor government, or should we say aspirational targets that the Labor government had in terms of the number of new dwellings that would be built. They're miles behind those targets, and that's because they can't really do anything about it. They don't build the houses, and sure, they can provide more social housing, and that's good for those that are marginalised out of the housing market, and more power to them for that. But the real problems in the housing market in terms of affordability is we just don't have enough houses to go around, and that will continue to put pressure on prices and rents, and we're seeing that this year, Michael, continuing. And I'm not sure the Coalition have any better solutions to that as well, because I think they were talking about reducing the number of foreign property developers, which is a hoary old chestnut, because we need more developers, not less developers, and it doesn't matter where they come from, because they can't live in the properties they develop unless they have residency. So if they're building them for Australians, good luck to them. The more, the merrier, and it means they're competing with other developers, which means it's with more competition, hopefully a more competitive product comes out of it. But again, we shouldn't pay too much attention to what the conversations that are created during election campaigns are, particularly in regard to solutions to the housing market, which basically lie with state governments, not the federal government. We'll be back together again early next week, and when we are, it's hoped that the election result will already be finalised, and on that basis, we'll have lots to discuss. There'll also be the CPI figures are going to come out. So we'll have a better understanding of what the Reserve Bank may do. Thanks for all that information, Andrew. That's good, Mike. And yes, those CPI figures are important. We would expect, because as we've discussed here, the monthly data, we would expect to see, again, some improvement in the data, particularly given the shakeout in the oil price, but it's those quarterly data figures that will be released, the March quarter data figures, which the Reserve Bank will be looking closely at because that is their preferred measure of the quarterly data sets. I guess it might be just the full stop on the decision to cut rates. We'll wait and see. Okay, catch up with you next week. Thank you, Andrew.