The Fastest-Growing States in Australia's Property Market in 2023

Scott Kuru December 16, 2023 4 min read

KEY POINTS

Median home prices have grown fastest in 2023 in Western Australia, Queensland, and South Australia
Low levels of supply and strong buyer interest in the three states have helped keep home values increasing
Analysts are optimistic about the price growth prospects in all three states

There are many ways of measuring and comparing growth when it comes to Australia’s states and territories, but if you look at it from a property point of view, there were three clear standouts in 2023: Western Australia, Queensland and South Australia.

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Western Australia

CoreLogic’s figures for December show that over the past year, properties in Perth have increased an astounding 13.5% to a median dwelling price of $646,520, with the city suffering from a chronic undersupply of homes and the tightest rental market in the country.

And although the national “tree-changer” boom has slowed and, in some cases, reversed, Regional WA has powered ahead, with home prices growing 7.9% over the past 12 months.

Damien Collins is a former President of the Real Estate Institute of WA who now heads the property advisory group Momentum Wealth, which is tipping that the Perth market will grow another 10% next year.

"As we look towards 2024, WA's job prospects are set to continue attracting workers to WA, and these new residents will need somewhere to live, which will drive further demand", he says.

Mr Collins points towards national accounts figures that show Western Australia achieved a total output of Gross State Product (GSP) of $445.3 billion in 2022-23, equal to almost one-fifth (17.4%) of Australia's total economic growth or GDP.

Not surprisingly, those strong GSP results were largely driven by WA's mining industry which contributed $200 billion alone.

Recent quarterly growth figures show Western Australia has added another 2.4% of growth in just the three months to the 30th of September this year.

CommSec ranked WA 5th in its latest “State of States” report, which considers a number of different metrics besides housing prices and economic growth, but it did note that Western Australia ranked first on relative population growth and “has the strongest economic momentum”.

Queensland

Home values in Brisbane have grown by an eye-watering 10.7% to a median price of $779,270 over the past year, according to CoreLogic, shrugging off the effects of 13 straight rises in the cash rate by the Reserve Bank of Australia.

And while some of the steam has come out of the price recovery in the other east coast capitals, Brisbane still grew 1.3% during November.

Regional Queensland has also had strong price growth over the past year, with home values on average up by 7.2%.

Bureau of Statistics figures show Queensland’s economy grew by 2.3% in 2022/23.

That’s below the national figure of 3% and strong state growth of 5.5% in 2021/22.

The ABS says the main reason for lower growth this past financial year was mining (-4.0%) “with lower volumes of coal production and exports due to weather disruptions and ongoing maintenance.”

But John McGrath - head of the national McGrath Real Estate Group - says the long-term outlook is positive, “with strong population growth and an infrastructure boom in the lead-up to the Brisbane 2032 Olympic and Paralympic Games.”

“Queensland is an attractive place for first homeowners”, he says, “with the State Government offering a grant that gives eligible buyers $15,000 towards buying or building a new home.”

“Things are looking good for investors, but not so good for renters, with Brisbane rents rising by 10.3% in FY23.”

“Rents also rose by 4.5% on the Sunshine Coast and 7% on the Gold Coast over the same period”, he says.

In an interesting metric, CommSec ranked Queensland first on growth in Housing Finance, indicating there’s still extremely strong home and investment buyer activity in the Sunshine State.

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Gold Coast Skyline

South Australia

Along with Perth, Adelaide largely shrugged off the national correction in property prices that started in the middle of 2022.

Home price growth over the 12 months to November has been an extremely healthy 7.6% to a median value of $704,267, according to CoreLogic, and at 0.5%, Adelaide has one of the lowest vacancy rates for rental properties in the country.

And there’s some indication that growth may actually be accelerating in Adelaide while it eases in some other cities, with home values growing 1.2% in November alone.

CoreLogic’s Research Director Tim Lawless said there’s strong buyer demand at a time of remarkably low levels of properties coming onto the market.

“This imbalance between available supply and demonstrated demand is keeping strong upward pressure on housing values across the city,” he says.

Like Perth, there’s also been strong investor interest in the City of Churches, as many buyers are priced out of the expensive East Coast capital markets.

If growth in Adelaide is impressive, Regional South Australia has been the star performer for home price growth outside Australia’s capital cities.

According to CoreLogic, non-metro SA has grown at 10.1% over the past year.

It continues the pattern of strong demand for properties in Regional South Australia which has seen home prices grow an astounding 51.9% in just over 3 and a half years.