Australian houses are now only a few thousand away from having a $1m median value.
Domain's latest quarterly report showed that national median house prices reached $994,579 in September, representing a 3.5% quarterly and 21.9% annual gains.
Three cities — Sydney, Melbourne, and Canberra — recorded median house prices that are over $1m.
The gains were relatively muted in the unit market, where values have increased by only 1% quarterly and 6.8% yearly to reach a median of $609,642.
Sydney house prices an inch below $1.5m
House and unit prices in Sydney are at new record highs, with the former increasing by roughly $6,700 per week over the past year to $1.49m.
On an annual basis, house prices in the New South Wales capital increased by 30.4%, its fastest yearly gain on record.
Unit prices also hit a new record high of $802,475, surpassing the mid-2017 peak.
Despite the growth in prices tapering in recent months, the report said the gains have created a barrier for many buyers who are left struggling to come up with a deposit.
"This has resulted in the number of home loans for NSW owner-occupier first home buyers dropping 21% from the recent March high,” the report said.
"Upsizing is also becoming a financial leap despite the benefit of strong equity growth, and particularly challenging if sold prior to purchasing. This is reflected in a 13% drop in NSW owner-occupied home loans since March."
Melbourne still has room to growth
Melbourne's quarterly gains in both house and unit prices remained muted relative to other capital cities.
Despite this, the city continues to record new record high prices for both property types.
"Since the beginning of the pandemic, Melbourne has seen the second-lowest house price gain of all the cities, which could signal the city has more room for growth as it emerges from lockdown," the report said.
Furthermore, despite being impacted by the lockdown for most of the September quarter, Melbourne house prices still had its highest annual increase in 11 years.
Domain noted that the lengthy lockdowns have resulted in more buyers preferring to get larger homes.
"This has resulted in house prices growing almost three times faster than units over the past year, a divergence that has created a record price gap," the report said.
Canberra breaks $1m price tag
Despite the lockdowns and restrictions during the quarter, Canberra house prices still grew by 5.7% to reach a new record high of $1.07m.
Canberra also reported its strongest annual upswing in history during the quarter at 32.4%.
"Buyers continued to operate in a sellers’ market due to the heightened competition in securing a sale and exaggerated reduction in supply throughout lockdown weeks," the report said.
Canberra's auction market was also a bright spot, as it consistently recorded an above 80% clearance rate for every month in the year so far.
The Domain report said the premium end of Canberra's housing market tends to lead Canberra house price cycles, which has been the case over the past quarters.
"While all regions reached a new record high house price, price growth at the upper end of the market is starting to lose momentum, suggesting the price growth peak has passed," the report said.
Photo by Nikola Knezevic on Unsplash.