Australia’s median capital city house price broke the $1million median barrier for the first time ever in 2021 – and this boom is expected to continue in smaller cities this year.
Median prices for a home with a backyard in Sydney, Melbourne, and Canberra are now in the seven figures, while those in Hobart, Brisbane, and Adelaide, which are yet to break $1 million, are tipped to grow by 20% to 30% in 2022.
Weighted for population and sales volumes across all the capital cities, Australia's median house price in 2021 was up by 25.2% to $1,066,133.
Nicola Powell, Domain’s chief of research, said “demand continues to outstrip supply across a majority of the cities,” but that “rapid price growth and affordability issues are likely to shift demand in 2022,” The Daily Mail reported.
This was due to interest rates dropping to a record low 0.1% and banks getting $188 billion from the Reserve Bank to provide cheap loans via its Term Funding Facility.
According to the Domain sales median house price data, Canberra was Australia’s best-performing capital city market in 2021, with prices rising by 36.6% to $1,178,364.
It was closely followed by Hobart, with prices surging by 34.6% to $752,110. House prices in the Tasmanian capital are expected to climb by another 20% in 2022, even after seven years as Australia's best-performing state.
Brisbane’s median house price lifted by 25.7% last year to $792,065, with the Queensland capital tipped to grow by 25 to 30% in 2022, after 15 years of flat increases. In Adelaide, house prices saw a 27.5% growth to $731,547, with a further 20% increase predicted in 2022.
Meanwhile, Sydney and Melbourne are expected to see only single-digit increases in house prices this year, as thousands of Australians relocate for lifestyle reasons. With the pandemic speeding up working-from-home arrangements, many Australian opt to move to leafy postcodes, The Daily Mail reported.