House Prices Are Rising Again! What It Means for Buyers, Renters and Investors.

Property research group Cotality says Australian home values have now risen for six months in a row. The median home value across the country is now 844 thousand dollars. That is an increase of 3.7 percent in just one year.

One of the main reasons prices are rising is lower interest rates. When the Reserve Bank cut the cash rate in February it gave buyers more borrowing power. This means people can borrow more and are willing to pay more which pushes prices higher.

All Cities Seeing Growth

Every capital city saw price increases in July. Darwin had the biggest jump at 2.2 percent followed by Perth at 0.9 percent. Even though Darwin is still the most affordable capital investors are looking there because rental returns are strong.

Houses are growing in value faster than units. In the last three months house prices rose by 1.9 percent while unit prices went up 1.4 percent. The price gap between houses and units is now over 223 thousand dollars.

Supply Is Still Tight

One reason prices are rising is that there are not enough homes for sale. Listings are down by 20 percent compared to the usual numbers for this time of year. That means more people are competing for fewer homes.

Real estate agent Matthew John from Melbourne says he is seeing more offers and more buyers at auctions.

We are seeing more people trying to secure homes early he said. Buyers who missed out before are acting fast so they do not miss out again.

Rents Are Climbing Too

If you are renting you are probably feeling the pressure. National rents rose by 1.1 percent in the last three months. Darwin and Hobart had the biggest rent jumps. Vacancy rates are very low which means less choice for renters.

There are simply not enough rental homes and that is unlikely to change soon. Rising incomes are also helping some renters pay more especially in cities like Sydney and Brisbane.

What About First Home Buyers

Rising prices are good for those who already own property but it is getting harder for first home buyers to get in. On average homes now cost about eight times the typical household income.

Economist Shane Oliver says buyers need help from family more than ever.

Prices are much higher than they were 20 years ago he said. Even with lower rates it is still hard to save a deposit and buy a home.

Cotality researcher Eliza Owen agrees. She says prices are rising but not as fast as during the pandemic because affordability is now a big barrier.

Looking Ahead

Another interest rate cut is expected in August. If that happens borrowing power will increase again and property prices may keep rising.

There are still challenges though. Construction costs are high. New housing approvals are low. There are not enough tradespeople. And household debt is still a concern.

These things will slow down how fast prices grow but they will not stop it completely.

Brisbane Market Snapshot

In Brisbane home values rose by 0.7 percent in July. That is a bit lower than June but still strong growth. The city now has the second highest median home price in the country after Sydney.

Unit prices are growing faster than house prices in Brisbane. This has been the trend since early 2024. Rent prices are also rising steadily.

What Should You Do

If you are planning to buy sell rent or invest now is a good time to stay informed

• Sellers – Buyer interest is strong and there is less competition

• Buyers – Know your budget get loan approval and move fast

• Renters – Keep an eye on new listings and talk to your agent early

• Investors – Areas like Darwin Perth and parts of Queensland are offering good returns

As we move into spring more homes are likely to come onto the market. But for now demand is still high and supply is still tight. That means prices are likely to keep rising at a steady pace.

For clear updates and simple insights about what is really happening in the market stay connected with RE4U your easy guide to Australian property.

Sources: ABC News, Cotality, REA Group.