SYDNEY, (Reuters) – Australian home prices were still rising nationally in April even as more of the heat came out of the Sydney and Melbourne markets, with the smaller cities and regions proving resilient to the risk of higher mortgage rates.
Figures from property consultant CoreLogic out on Monday showed prices in the combined capital cities nudged up 0.3% in April from March, as Sydney dropped 0.2% for a second month and Melbourne held steady.
Brisbane again fared much better with a rise of 1.7%, while Perth rose 1.1% and Adelaide 1.9%.
Values in the regions climbed 1.4% in April, and 24% on the year, amid a shift to country living and greater space. Combined, prices nationally rose 0.6% in April, to be up 16.7% on the year.
“A rebound in migration rates as state and international borders re-opened could partially explain the renewed exuberance, along with persistently low advertised stock levels and strong economic conditions,” said CoreLogic’s research director, Tim Lawless.
The market had its strongest year ever in 2021 with the notional value of Australia’s 10.8 million homes rising by A$2 trillion ($1.42 trillion) to A$9.9 trillion.
The boom was a windfall for household wealth and consumer spending power, but also caused concerns about affordability that are a hot-button issue for Federal elections due on May 21.
The market faces more headwinds as the Reserve Bank of Australia (RBA) is widely expected to hike interest rates for the first time in a decade, perhaps as early as its May policy meeting on Tuesday.
Rates are currently at emergency lows of 0.1% but financial markets are wagering they could rise to around 2.5% by the end of the year.