House prices finish 2019 on a high, as Sydney and Melbourne lead gains nationally


House prices in most Australian cities finished 2019 on a high, with national average dwelling prices lifting 1.1 per cent during December and by 2.3 per cent over the year, according to CoreLogic.

For the three-month period to December, national average house prices soared by 4 per cent — the fastest rate of national dwelling value growth over any three-month period since November 2009.

Key points:

  • Australian home prices rose an average of 1.1 per cent last month, with Sydney (1.7 per cent) and Melbourne (1.4 per cent) leading the gains
  • Although the monthly capital gains trend remained fast-paced, the 1.1 per cent rise in December was softer relative to the 1.7 per cent gain in November
  • Nationally, house prices are still off their previous record highs in all capitals except Hobart and Canberra

On an annual basis, five of eight capital cities, and five of the seven “rest-of-state” regions, ended the year with price rises.

Among the capitals, Sydney and Melbourne recorded the highest annual capital gain, with both cities posting a 5.3 per cent rise in dwelling values over the year.

During December, Sydney house prices rose 1.7 per cent, while Melbourne house prices shot up 1.4 per cent.

CoreLogic’s head of research, Tim Lawless, said that although the monthly capital gains trend remained fast-paced, the 1.1 per cent rise in December was softer relative to the 1.7 per cent gain in November and the 1.2 per cent rise in October.

“This would suggest that the pace of capital gains may have been dampened by higher advertised stock levels or worsening affordability pressures through early summer,” he said.

Mr Lawless said if the current quarterly rate of growth persisted this year, the national housing market would record a nominal recovery in March as dwelling values rose to new record highs.

“A nominal recovery in housing values implies home owners are becoming wealthier, which may also help to support household spending,” he said.

“However, the flipside is that housing affordability is set to deteriorate even further as dwelling values outpace growth in household incomes, signalling a setback for those saving for a deposit.”

If the strong gains continue, Sydney median house prices could shoot back up over the $1 million mark.

The data shows the typical Sydney free-standing home was worth $973,664 at the end of December, while the median Sydney unit was worth $746,017.

The typical Melbourne free-standing home was worth $778,649 at the end of December, while the median Melbourne unit was worth $576,475.

Monthly rise

(all dwellings)

Annual rise

(all dwellings)


(median price)


(median price)

Sydney1.7%5.3%$973,664$746,017Melbourne1.4%5.3%$778,649$576,475Brisbane0.7%0.3%$546,781$386,023Adelaide0.5%-0.2%$471,419$323,662Perth0.0%-6.8%$456,289$352,099Hobart0.2%3.9%$506,395$393,399Darwin-0.5%-9.7%$464,625$279,357Canberra0.1%3.1%$691,551$439,496National1.1%2.3%$552,196$511,111Darwin only region to record falls for the month

Across the other capital cities, Brisbane rose 0.7 per cent for the month and 0.3 per cent for the 2019 year.

Adelaide was up 0.5 per cent for the month but fell 0.2 per cent for the year.

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Perth values were unchanged for the month and 6.8 per cent lower for the year.

Hobart lifted 0.2 per cent for the month, and 3.9 per cent for the year.

Darwin was the only region among the capital cities and “rest-of-state” areas to record a fall in values over the month, with a 0.5 per cent decline. And Darwin house prices dropped 9.7 per cent over the year.

Canberra prices rose 0.1 per cent for the month and 3.1 per cent for the year.

For the three months to December, the best performing capital city was Sydney, which lifted 6.2 per cent, and the weakest performing capital city was Darwin, which dropped 1.4 per cent.

However, Darwin had the highest rental yield for the three-month period at 5.9 per cent, and Sydney had the lowest rental yield at 3 per cent.

CommSec chief economist Craig James said Sydney home prices were up 66.7 per cent over the decade and Melbourne prices lifted 53.5 per cent over the decade.

“Wealth is at record highs and incomes are still running faster than consumer prices,” he said.

“The missing ingredient is confidence with many Aussies preferring to save and live more simply rather than spend and add to the mountain of possessions,” Mr James said.

A year of highs and lows

Mr Lawless said the positive year-end results masked a year of two distinct halves.

“We saw capital city dwelling values fall by 3.8 per cent over the first six months of 2019, and then rebound by 7 per cent over the second half of the year,” he said.

“The housing value rebound was spurred on by lower mortgage rates, a relaxation in borrower serviceability assessments, improved housing affordability and renewed certainty around property taxation policies post the federal election,” he said.

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“Lower advertised stock levels persisted, providing additional upwards pressure on prices amidst rising buyer activity.”

Despite a strong rebound over the second half of 2019, Mr Lawless said, property values across most regions of Australia were still below their previous record highs.

Nationally, the CoreLogic index recorded a peak in October 2017.

The only regions where housing values were currently tracking at new record highs were Hobart, Canberra and regional Tasmania.

Tapas Strickland, a director of economics and markets at National Australia Bank, said the national gains meant prices were now 3.1 per cent below the all-time high reached in 2017, with Melbourne 2.3 per cent below its peak and Sydney 6.4 per cent away from its high.

“Assuming price growth remains solid into 2020, then house prices are set to exceed their prior peaks by early to mid-2020,” he said.

Mr Strickland said NAB expected the Reserve Bank to cut interest rates again February and June from its current rate of 0.75 per cent, and that this was likely to support house prices in 2020.

But he said higher prices were yet to translate into an improved construction outlook, given building approvals were currently down 18.2 per cent year on year, and financing conditions for property developers remained tight.

“At the same time, population growth continues to be strong, which will support underlying demand for housing into 2020 and also lead to tighter housing market conditions,” he said.