Prices keep rising as rate rise fears fail to dent summer demand

Australia’s housing market continued to push higher in January, with national house prices rising to $973,000 and unit prices to $746,000. Both segments recorded further monthly gains, lifting annual growth to 12.5 per cent for houses and 9.1 per cent for units. The strength in January comes despite growing concern that interest rates may rise again at the Reserve Bank’s upcoming meeting.

What stands out in the January data is that higher rate expectations do not yet appear to have been priced into the market. Price growth remained broad-based over summer, suggesting buyers continued to transact as though borrowing costs would remain unchanged. This is a clear contrast to the start of last year, when expectations of rate cuts began influencing behaviour as early as January, well before the first reduction was delivered in February.

The same markets that have driven this cycle remain in the lead. Darwin and Perth recorded the strongest annual house price growth, with increases of close to 20 per cent, while Brisbane also continues to post solid gains. Monthly growth across these cities remains firm, indicating demand is still absorbing very limited supply. Adelaide, the Gold Coast and the Sunshine Coast are also recording ongoing increases, albeit at a more moderate pace.

In the larger capitals, growth is slower but still positive. Sydney, Melbourne and Canberra remain below the national average on annual measures, reflecting weaker economic momentum and more subdued population growth. Even so, prices in these cities continue to edge higher, with no broad-based declines evident.

Regional markets continue to play an important role in sustaining national growth. House prices across regional Australia rose again in January, with annual growth now above 12 per cent. Regional Western Australia and regional South Australia remain standout performers, underpinned by low stock levels and ongoing demand pressures. These conditions continue to limit the market’s sensitivity to short-term changes in interest rate expectations.

The unit market is showing a similar pattern. Perth, Brisbane and Adelaide continue to record the strongest gains, while Sydney and Melbourne remain more subdued. Nationally, unit prices are now more than nine per cent higher than a year ago, highlighting the depth of demand in a segment where new supply remains constrained.