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If current growth rates continue, Perth requires just eight months to reach a one-million-dollar median. Adelaide will achieve this milestone within approximately fifteen months. Sydney's acceleration toward two million dollars continues with it now sitting at $1.6 million. Given Sydney’s sensitivity to rate cuts, and the potential for more cuts coming through this year, hitting a $2 million dollar median seems possible by the end of next year.
Regional markets are outpacing capitals, with Regional Western Australia posting 11.5 per cent annual growth and Regional South Australia achieving 10.0 per cent, demonstrating the breadth of current price pressures.
Persistent construction challenges continue limiting new housing supply, providing fundamental support for existing property values. The construction industry's ongoing struggles with labour shortages and material costs create supply bottlenecks that cannot be resolved quickly. In addition land prices aren’t coming down and will in fact be supported by lower rates.
What could derail the momentum
While current conditions appear supportive of continued price growth, several factors could disrupt this trajectory. Rising unemployment resulting from slowing global economic growth triggered by trade tensions could weaken buyer demand, despite interest rate cuts providing some offset. Perversely, the current surge in prices may kickstart more development projects as margins become attractive enough to overcome construction challenges, ultimately increasing supply. However, given the time required for new projects to reach market, any supply response would likely take years to meaningfully impact prices.
