Australian house prices hit surprising new milestone in July
National home prices reached a new record high of $827,000 in July, up 0.3 per cent over the month of July.
Home prices are now 4.9 per cent higher or around $39,000 more expensive than they were this time last year.
REA Group senior economist Anne Flaherty said the gains were off lower volumes and strong growth out of the regions.
'Regional areas outperformed their capital city counterparts in most markets, recording stronger growth over both the month and the year,' she said.
'South Australia remains the strongest market, with Adelaide and regional SA the two top performing regions in the country.'
Property prices hit a new record high in July. Picture: NewsWire / Gaye Gerard
The gains came despite the RBA shocking markets and holding the cash rate in July.
Experts now widely predict a rate cut will come after the RBA's 11-12 August meeting.
Ms Flaherty said despite July being the slowest growth rate this year, house price growth could pick back up on strong demand and future rate cuts.
'While the number of homes for sale has slowed over winter, buyer demand remains strong, with auction clearance rates sitting at the highest level in more than two years,' she said.
'Home prices are expected to break into new territory later this year, with further interest rate cuts expected to add momentum to price growth.'
The gains were led by regional areas which were up 0.4 per cent over the month and 6.5 per cent over the year.
Leading the capital city growth was Adelaide up 0.9 per cent in the month, followed by Hobart which gained 0.5 per cent and Brisbane which is up 0.4 per cent.
Offsetting these gains were more subdued growth out of Sydney and Darwin which were up 0.1 per cent each.
Canberra prices slipped by 0.1 per cent.
House prices rose again in July although the pace of growth is slowing. Picture: Supplied
House price growth slowed in the month of July: Picture Supplied.
New houses picks up
While supply of housing remains a struggle and a key driver of house price growth, there is signs of life in the construction sector.
According to data released by the Australian Bureau of Statistics, there was an 11.9 per cent increase in total dwelling approvals in June to 17,076.
This was the highest level of approvals since August 2022.
Approvals for private sector houses fell 2.0 per cent.
There have been a total of 185,844 dwellings approved, in original terms over the last 12 months.
This is 13.5 per cent higher than the 12 months before that, which had 163,692 dwellings approved.
HIA senior economist Tom Devitt said new building approvals recovered from the troughs in 2023-2024 financial year.
'Interest rate cuts from the Reserve Bank in February and May this year, with the expectation of more to come, will help bring more potential homebuyers back to the market in the lagging – and often more expensive – states and territories,' he said.
'Even with lower interest rates, Australia is set to start just 200,000 homes per year, on average, over the next four years.
'Multi-unit activity, in particular, needs to do more heavy lifting. Multi-unit commencements need to double from current levels in order to achieve the government's housing targets.'
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