Property prices have hit yet another record, with capital city house prices rising by 1 per cent, while units are also seeing their values increase. According to Domain, capital city median house prices jumped 1 per cent to $1.112 million, while capital city units rose 0.6 per cent to a median of $637,578 over the quarter.

Sydney house prices have risen above $1.6 million for the first time after climbing 2.1 per cent in the past quarter. House prices in Sydney, Brisbane, Adelaide and Perth are all at record highs, as are unit prices in Brisbane, Adelaide and Perth. Perth continues to be one of the strongest markets in the country, with units surging 8.1 per cent over the quarter – the fastest in 3.5 years. However, despite the record numbers, price growth is actually starting to slow.

House price growth was slower in the March quarter – compared to the previous quarter – in Sydney, Brisbane, Melbourne, Adelaide, Perth and Darwin. Unit price growth also eased in Melbourne and Adelaide.

Domain Chief of Research and Economics, Dr Nicola Powell, said rising supply is starting to slow down prices. “A reduction in the cash rate could shift this trend, potentially increasing housing turnover,” Dr Powell said. “Meanwhile, Perth and Brisbane have experienced a long-term decrease in the number of properties for sale, which has contributed to significant price growth in these cities.”

For the combined regional areas, house prices fell 1.1 per cent in the March quarter to $590,378. At the same time, units saw prices rise 2.6 per cent to $465,711.

Dr Powell said property prices were expected to rise further this year. “This upward trend is driven by various factors, including a chronic shortage of new homes, strong population growth, high building costs, and a tight rental market, all of which boost housing demand,” she said. “The shortage of new housing is likely to persist, as new dwelling approvals have dropped to a nearly 12-year low after trending downward over the past two years…

This ongoing scarcity will maintain pressure on our housing supply.”

Dr Powell said the rental crisis is also forcing many people into home ownership. “We expect increased demand at the more affordable end of the market, particularly for units,” she said. “This trend will likely affect affordable markets such as Perth, Brisbane, and Adelaide, along with units in higher-priced markets like Sydney.”