Australian property prices rose in July as the housing market continued its rapid recovery, with data revealing all but one capital city saw values rise last month.

CoreLogic’s latest home value index, published on Tuesday, rose 0.7 per cent in July – the fifth month in a row where property prices have risen nationally.

National home values are just 5.3 per cent lower than their April 2022 peak, with Perth and Adelaide posting fresh record highs over the past month.

CoreLogic said housing demand will likely remain strong over the next few years amid “strong population growth”, with few signs yet of any significant supply response.

However, prices in Sydney rose 0.9 per cent – which is only about half of the 1.8 per cent rise recorded back in May, CoreLogic said.

“Sydney has also seen a significant rise in the number of fresh listings added to the market, 9.9 per cent higher than the same time last year and 18 per cent above the previous five-year average,” CoreLogic research director Tim Lawless said.

“An increased flow of new listings provides more choice and may be working to reduce some of the urgency felt among prospective buyers.”

Going up

Brisbane (up 1.4 per cent), Adelaide (1.4 per cent) and Perth (1 per cent) led the property price gains in July, followed by Australia’s two largest cities Sydney (0.9 per cent) and Melbourne (0.3 per cent).

Canberra (-9.1 per cent) was the only capital to record lower prices for the month, with Hobart unchanged.

Elsewhere, the combined regional area index rose 0.2 per cent, CoreLogic’s figures revealed.

The regions to record the strongest property price growth over the past 12 months are Marrickville in Sydney (up 5.1 per cent) and Mandurah near Perth (up 10 per cent).

Meanwhile, prices in Brighton near Hobart have fallen 6.3 per cent.

Mr Lawless said the slowdown in value growth has been driven by the most expensive quartile of homes in the market, with the index for expensive homes rising 0.7 per cent compared to 1.8 per cent in May.

“Some resilience in growth across the middle and more affordable end of the market aligns with housing finance data which has shown a stronger bounce back in the value of lending to first-home buyers and investors over recent months,” Mr Lawless said.

“These segments tend to be more active across the middle to lower end of the pricing range where competition to purchase a home may be more intense.”

The latest data also shows buyers have become more active in the market despite the highest interest rates since 2012 as the Reserve Bank battles sky-high inflation rates.

But with the rate cycle near its peak, the monumental squeeze on borrowing power seen over the past year is unlikely to get much worse.

Unfortunately, that doesn’t mean borrowers are out of the woods.

CoreLogic said that existing rate hikes will flow through to a greater number of home owners in coming months, with more than 800,000 mortgage payers set to move from low fixed rate loans to variable rates.

Migration boosts demand

“Net overseas migration is expected to hold at above average levels over the coming years, underpinning housing demand against a backdrop of persistently low dwelling approvals,” CoreLogic said.

“The latest estimates from National Housing Finance and Investment Corporation forecast Australia’s housing sector will be undersupplied by around 175,000 dwellings by 2027 which will be another factor supporting housing prices.”