Latest News on the Australian Property Market: Adelaide Breaks the Million AUD Barrier

According to the latest report from the Australian property data platform Domain, the median residential prices in all five major capital cities of Australia have now exceeded 1 million AUD. Among these, Adelaide has made headlines by becoming the first major capital city to see its property prices surpass this milestone, reaching 1,000,202 AUD (approximately 500,000 HKD). Meanwhile, Sydney's property prices are approaching 1.7 million AUD (approximately 850,000 HKD), and Melbourne's housing market is showing signs of recovery, leaving many experts who anticipated a decline in Australian property prices quite surprised.

The Domain report indicates that the median residential prices in Sydney, Melbourne, Brisbane, Adelaide, and Canberra have all crossed the 1 million AUD mark. Notably, Sydney has seen the most significant price increase, nearing the 1.7 million AUD level, just 8,000 AUD (about 40,000 HKD) shy of its historical high.

In Adelaide, the median house price has surged by an astonishing 84% over the past five years, climbing from 543,145 AUD (approximately 271,000 HKD) to 1,000,202 AUD (approximately 500,000 HKD), an increase of 457,057 AUD (about 228,000 HKD). Nicola Powell, Chief Research and Economics Officer at Domain, stated that this breakthrough is great news for homeowners who purchased earlier, but it may be disheartening for first-time buyers who have yet to enter the market.

She pointed out that Adelaide's property prices have nearly doubled in five years, with the 2020 median price being only half that of Sydney's (1,161,000 AUD, approximately 580,000 HKD). The high value for money has propelled Adelaide’s housing market to new heights.

Factors such as the prevalence of remote work during the pandemic, a low-interest-rate environment, and a strong "fear of missing out" (FOMO) sentiment have all contributed to the rise in Adelaide's property prices. Additionally, the local rental market has influenced purchase intentions, as the vacancy rate is only 0.4%, putting pressure on rental prices and prompting tenants to transition to buyers, accelerating their entry into the market.

In Sydney, property prices have risen for two consecutive quarters, with transaction volumes increasing by 10% compared to the same period last year. Powell believes that Sydney's prices have significantly outpaced other cities, with the nearing 1.7 million AUD price point being astonishing, as market discussions have shifted from "Will prices rise?" to "When will they surpass 2 million AUD?"

Melbourne's market is currently considered undervalued, with a modest increase of 0.3% for the season, bringing the median residential price to 1,035,887 AUD (approximately 518,000 HKD). Once ranked just behind Sydney, Melbourne has now been surpassed by Canberra. However, Powell indicates that anticipated interest rate cuts in the future could help boost market performance, and the long-term value for money will attract more buyers.

Currently, the price gap among Canberra, Melbourne, Brisbane, and Adelaide's median residential prices has narrowed to less than 50,000 AUD (about 250,000 HKD), indicating a trend towards a more consistent national pricing structure. Perth may also break the million AUD threshold by the end of this year, while Darwin recorded the highest quarterly increase in the country at 2.4%, with a median residential price of 659,172 AUD (approximately 330,000 HKD).

Conversely, Brisbane experienced its first slight decline in years, with prices dropping by 3,300 AUD (about 16,500 HKD), but the unit market remains strong, having seen an increase of nearly 92,000 AUD (approximately 460,000 HKD) over the past year. Canberra also recorded a 1.3% decline, with an average decrease of 13,519 AUD (approximately 68,000 HKD).

These market dynamics illustrate the evolving landscape of the Australian property market, making it essential for potential buyers and investors to stay informed and engaged.