Capital city house prices reach record high in December

The national median house price now lies at $852,940, increasing by 4.1 per cent over the quarter and 5.8 per cent year-on-year, according to the Domain House Price report for the December quarter.

Apart from Darwin and Perth, all major capital cities saw house prices rise significantly over the December quarter, with Canberra and Hobart leading the charge with increases of 6.4 per cent and 6.1 per cent, respectively.

Sydney and Melboune also cemented their recovery, with quarterly increases of 4.8 per cent and 5.3 per cent, respectively.

According to Domain senior research analyst Dr Nicola Powell, house prices are “now at new peaks” after getting through the short-lived COVID-induced dips earlier in 2020.

Now only 1.4 per cent below the mid-2017 peak, house prices are expected to surpass this high over the next quarter, Dr Powell said.

In terms of annual gains, Hobart emerged as the winner with a 12.4 per cent price growth, followed by Canberra with 9.1 per cent and Sydney with 6.7 per cent.

The double-digit growth has pushed Hobart off the top as one of the most affordable capital cities to purchase a house, with the Tasmanian capital emerging above Darwin and Perth, Domain found.

“First home buyers, upsizers and downsizers are taking advantage of cheap credit, government incentives and fewer investors to compete against.

“Post-pandemic, Tasmania will be an attractive destination for residents seeking liveability, lower-density living and affordability. This could put further pressure on prices,” Dr Powell highlighted.

She predicted that the capital cities will remain on the recovery track in 2021, as buyers and sellers return to the market, enthused after a COVID-induced retreat and propped up by government measures and low interest rates.

Capital city house prices, December quarter